Oil futures prices dropped on the New York market during Nov. 18 trading, which analysts attributed to renewed concerns that the Federal Reserve might begin to taper its economic-stimulus program soon based upon comments made during a speech by a Fed spokesman.
William Dudley, president of the Federal Reserve Bank of New York, said he was becoming more optimistic about the US economy.
“I have to admit that I am getting more hopeful,” Dudley said during a speech to Queens College in New York. Dudley suggested no timetable, saying only that the Fed will begin to reduce its $85 billion/month bond-buying program when the time is right.
Analysts took his comment as an indication that the timing might be soon although the Fed has been discussing this anticipated measure for months without taking action. The stimulus helps support oil prices by weakening the dollar, making crude oil less expensive to buy using other currencies.
On the London market, Brent crude for January delivery also declined slightly pending the scheduled resumption of international negotiations on Iran’s nuclear program. Representatives of Iran, five permanent members of the UN Security Council, and Germany, plan to meet on Nov. 20.
A potential agreement to restrict Iran’s nuclear program could result in the easing of some international economic sanctions on Tehran, including oil exports.
Heating oil for December delivery was down a rounded 1.7¢ to settle at $2.92/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for December delivery edged down by less than a penny to remain at a rounded $2.66/gal.
The December natural gas contract on NYMEX dropped 4.3¢ to settle at a rounded $3.62/MMbtu. On the US spot market, the gas price at Henry Hub, La., was a rounded $3.69/MMbtu, a 12.4¢ increase.
In London, the January ICE contract for Brent crude oil declined by 3¢, settling at $108.47/bbl. The December contract for ICE gas oil dropped by $1 to $910.25/tonne.
The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $105.04/bbl on Nov. 18, down 20¢ from Nov. 15 trading.
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