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Commentary

Oil prices reversed earlier gains today and fell below $77 as surging U.S. output as well as signs of weakening demand in China weighed on markets, even though supply woes in Venezuela and OPEC's ongoing production cuts offered crude some support. China's May crude oil imports eased away from a record high hit the month before, customs data showed, with state-run refineries entering planned maintenance. May shipments were 39.05 million tonnes, or 9.2 million (bpd), according to the General Administration of Customs. That compared with 9.6 million bpd in April. Further weighing on prices has been surging U.S. output EIA, which hit another record last week at 10.8 million bpd. That's a 28 percent gain in two years, or an average 2.3 percent growth rate per month since mid-2016. It puts the United States close to becoming the world's biggest crude oil producer, edging nearer to the 11 million bpd churned out by Russia. Is this what Trump meant by "making America great again?" The surge in U.S. production has pulled down U.S. WTI crude into a steep discount versus Brent to more than $11 per barrel, its steepest since 2015. This is occurring because of the rapid increase in production from U.S. shale coupled with the tightening of supplies elsewhere through the actions of OPEC and Russia.

Economic data/events (Times are London.)

* 3pm : U.S. Wholesale Inventories for April (final)

* 6pm Baker Hughes U.S. Rig Count

* 6:30pm: ICE weekly commitments of traders report for Brent, gasoil,

* CFTC weekly commitments of traders report on various U.S. futures and options contracts

* G-7 Leaders' Summit in La Malbaie, Quebec with heads of state from France, U.K., Germany, U.S. and Japan are expected

* See OIL WEEKLY AGENDA for this week's events

Singapore 380 cSt

Jul18 - 438.75 / 440.75

Aug18 - 434.75 / 436.75

Sep18 - 431.00 / 433.00

Oct18 - 427.25 / 429.25

Nov18 - 422.75 / 424.75

Dec18 - 419.25 / 421.25

Q3-18 - 434.75 / 436.75

Q4-18 - 422.25 / 424.25

Q1-19 - 410.25 / 412.75

Q2-19 - 397.75 / 400.25

CAL19 - 376.00 / 379.00

CAL20 - 303.50 / 308.50

Singapore 180 cSt

Jul18 - 448.25 / 450.25

Aug18 - 444.75 / 446.75

Sep18 - 441.25 / 443.25

Oct18 - 437.50 / 439.50

Nov18 - 433.50 / 435.50

Dec18 - 430.25 / 432.25

Q3-18 - 444.75 / 446.75

Q4-18 - 432.75 / 434.75

Q1-19 - 421.25 / 423.75

Q2-19 - 409.25 / 411.75

CAL19 - 390.50 / 393.50

CAL20 - 317.50 / 322.50

Rotterdam 3.5%

Jul18 - 422.75 / 424.75

Aug18 - 419.00 / 421.00

Sep18 - 415.00 / 417.00

Oct18 - 410.50 / 412.50

Nov18 - 406.00 / 408.00

Dec18 - 401.50 / 403.50

Q3-18 - 418.75 / 420.75

Q4-18 - 405.25 / 407.25

Q1-19 - 394.25 / 396.75

Q2-19 - 381.25 / 383.75

CAL19 - 355.00 / 358.00

CAL20 - 288.50 / 293.50