The oil complex settled lower Monday on bearish China data and increased OPEC production, amid weak fundamentals in the US.
NYMEX June crude settled 87 cents lower at $95.17/barrel, having traded in a $94.47-$95.68/b range throughout the day. ICE June Brent settled lower as well, down $1.09 at $102.82/b.
Products were mostly bearish, led by NYMEX June RBOB, which fell 3.93 cents to 2.8210/gal. Heating oil settled 1.52 cents lower at $2.8910/gal, but drifted into positive territory -- hitting a high of $2.9162/gal -- in early afternoon electronic trading.
ICE June gasoil settled $15.75 higher at $867.50/mt.
Overnight, official Chinese data showed the country's refiners processed 9.36 million b/d of crude in April, the lowest since August, according to Tradition Energy analyst Addison Armstrong in a morning note. Armstrong added that China's industrial output increased 9.3% year on year, compared with expectations for 9.4% growth.
China GDP data showing a 7.7% increase in the first quarter was also bearish, showing growth would stay below the key 8%-level, Citi Futures Perspectives energy analyst Tim Evans said in a note.
Meanwhile, an OPEC monthly report said its group's output increased to 30.46 million b/d in April, up from 30.18 million b/d in March.
"This data comes on top of weak fundamental picture here in US, right as we're retreating from last week's one-month high [of $97.17/b on May 6]," Tradition's Gene McGillian said.
"We have really low demand, and our fundamentals are out of line," he added.
Analysts continued to watch the US dollar closely as its recent strength has put downward pressure on the oil complex. The US Dollar Index was up 1.29% at 83.27 around the time of the NYMEX settle, hovering just below recent highs seen in early April.
"The strong dollar continues to be the main driver of the markets, spurred by moves from the [European Central Bank] and the [Bank of Japan] to devalue their own currencies," Again Capital partner John Kilduff said in a note.
Kilduff also pointed to disappointing Chinese home sales data, which suggest Beijing could be reining in outsized growth in that sector.
"Chinese home sales were down big in April, but the disappointment with regard to its industrial production should only be slight," he said.
More bearish signals could be found in talk that the US Federal Reserve may soon unwind its latest efforts to stimulate the US economy.
"The oil market got heavy as word of a possible story of a [Federal Reserve exit from quantitative easing] started to permeate the trading floor on Friday," Price Futures Group analyst Phil Flynn said in a note. Flynn cited a Saturday story in the Wall Street Journal which said that Fed officials were discussing plans to wind down the $85 billion/month bond-buying program.
The oil market seemed to ignore the small support offered in positive US retail sales data, which showed non-core retail sales rose 0.1% in April, up from -0.5% in May, US Census Bureau data showed. Core retail sales were flat.
Amid this bearish sentiment, Iranian oil minister Rostam Ghasemi said Monday that oil prices were below an "ideal range" and that Iran would seek a cut in OPEC's overall ceiling when the producers' group meets in Vienna later this month.
"Iran's proposal has always been to cut the ceiling," Ghasemi told reporters on the sidelines of a petrochemicals conference in Tehran when asked if Iran would seek a cut in the OPEC ceiling in order to push prices higher.
