Brent crude futures finished slightly higher in seesaw trading on Thursday, with investors concerned about violence in Greece and uncertainty surrounding the IEA's emergency oil release plan. But Brent posted the biggest quarterly decline in a year, sliding 4.9 percent in the three months ending June as investors worried about the demand outlook amid signs of a slower global economy.
Brent rose 8 cents on Thursday to $112.48 a barrel but ended June 3.6 percent lower, the second monthly loss in a row. US crude settled at $95.42 a barrel on Thursday, gaining 65 cents but shed 10.6 percent in the last three months, its biggest quarterly slump since the crash in the fourth quarter of 2008.
"With US trade winding down for the end of the quarter and the July 4th holiday coming up, we may be seeing some pause in frantic activity, with traders less willing to open new positions," analyst Tim Evans of Citi Futures Perspective said. US crude futures also fell for the second straight month in a row, ending June down 7.4 percent amid evidence of an economic slowdown in the Unites States, the world's largest oil consumer.
Oil's gains during the session were capped by a steep decline in the broader commodities complex, which tumbled when a report from the US Department of Agriculture put domestic corn supply way above estimates, adding that a bumper crop could be on the way. The report shocked forecasters and shoved grain markets sharply lower, sending the Reuters-Jefferies CRB index, a commodities benchmark, down as much as 1 percent for the day. Oil represents about 25 percent of the index.
Violence worsened in Athens after the Greek Parliament approved an implementation bill for a 28-billion euro package of austerity measures required under a European Union/International Monetary Fund bailout. "The ebullience from the resolution of the Greek debt crisis is yielding to the realities of a challenged demand landscape given the recent economic data," said John Kilduff, partner at Again Capital LLC.
"While there may be some signs that current economic soft patch has hit bottom, a real upswing is not near either." Meanwhile, the International Energy Agency has sent conflicting signals to the market this week. Some traders and analysts said the agency's planned 60 million barrel crude and oil product release has been badly co-ordinated outside the United States.
The Netherlands will hold a tender for sale of up to 700,000 barrels of crude oil on Friday, as part of the IEA stock release programme, while Germany has said its 2.1 million barrels of crude sales offered will be mostly Iranian heavy crude. J.P. Morgan analyst Lawrence Eagles said the varying auction methods in Europe and Asia may see less than a third of 30 million barrels earmarked for release in those countries taken up by traders, though he expected the vast majority of the 30 million barrels from the United States to be sold.