Oil prices dived on the New York market to settle at $66.15/bbl for the January crude oil contract on Nov. 28, falling more than $7/bbl from the previous closing after the Organization of Petroleum Exporting Counties announced the cartel agreed to maintain its production quota at 30 million b/d.
In a Nov. 27 statement, cartel members said they reviewed crude oil supply-demand forecasts for next year along with world economic forecasts.
“The global economic recovery was continuing, albeit very slowly and unevenly spread, with growth forecast at 3.2% for 2014 and 3.6% for 2015,” an OPEC news release said. Although world oil demand is forecast to increase next year, non-OPEC supply is expected to grow as well.
“As always, in taking this decision, member countries confirmed their readiness to respond to developments which could have an adverse impact on the maintenance of an orderly and balanced oil market,” OPEC said, adding it continues to monitor the world economy and oil markets.
OPEC’s next scheduled meeting is June 5. Some analysts attribute current ample worldwide oil supply to growing US unconventional production.
Leonid Fedun, OAO Lukoil vice-president, told Bloomberg in an interview in London that some shale producers risk becoming victims of their own success.
“In 2016, when OPEC completes this objective of cleaning up the American marginal market, the oil price will start growing again,” said Fedun. “The shale boom is on a par with the dot-com boom. The strong players will remain, the weak ones will vanish.”
Energy prices
The New York Mercantile Exchange January crude oil contract fell $7.54 on Nov. 28, closing at $66.15/bbl. The February 2015 contract fell $7.50 to $66.26/bbl.
The natural gas contract for January dropped 26.7¢ to a rounded $4.08/MMbtu. The cash gas price at Henry Hub, La., was $4.24/MMbtu on Nov. 28. US commodity markets were closed Nov. 27 for the Thanksgiving holiday.
Heating oil for December delivery fell 16¢ to a rounded $2.23/gal. Reformulated gasoline stock for oxygenate blending for December delivery dropped 13¢ to a rounded $1.90/gal.
The January 2015 ICE contract for Brent crude oil dipped $2.43 to $70.15/bbl. The February 2015 contract fell $2.41 to $70.58/bbl. The ICE gas oil contract for December rose $13.50, settling at $656.75/tonne.
The average price for OPEC’s basket of 12 benchmark crudes on Nov. 28 was $68.89/bbl, down $1.91.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.
