A correction was made to this story on Jan. 15.
Crude oil prices rallied on the New York and London markets Jan. 14 rising more than $2/bbl, and US light, sweet crude oil prices briefly traded higher than Brent crude oil prices, which has been rare in recent years.
On Jan. 15, the Organization of Petroleum Exporting Countries lowered its forecast for the increase in non-OPEC production for 2015. OPEC also said it sees slightly stronger worldwide oil demand this year, supported by lower oil prices.
“In 2015, non-OPEC oil supply is projected to grow by 1.28 million b/d, representing a downward revision of 80,000 b/d from the previous report,” OPEC said in its January monthly oil market report.
Separately, Jefferies investment global bank cut its average Brent price forecast for 2015 to $50.25/bbl from $72.25/bbl.
“We are again lowering our oil price forecast to reflect what will likely be an oversupplied market through at least the first half of 2015,” said Jason Gammel, Jefferies analyst. “Until the oversupply is corrected, prices will be biased to the downside.”
Natural gas prices rose on updated weather forecasts calling for cooler temperatures across the central US than had been previously forecast. Colder weather drives heating demand.
The US Energy Information Administration’s weekly storage report for the week ended Jan. 9 showed estimated working gas in storage at 2.85 tcf, marking a net decline of 236 bcf from the previous week. Gas stored underground across the Lower 48 states was estimated to be 282 bcf higher than last year for the same period and 113 bcf below the 5-year average of 2.96 tcf.
Energy prices
The NYMEX February crude oil contract jumped $2.59 Jan. 14, closing at $48.48/bbl. The March contract rose $2.45 to $48.96/bbl.
The natural gas contract for February climbed 29¢ to a rounded $3.23/MMbtu. The cash gas price at Henry Hub, La., rose 24¢ to $3.13/MMbtu on Jan. 14.
Heating oil for February was up 2¢ to a rounded $1.65/gal. Reformulated gasoline stock for oxygenate blending for February gained 8.2¢ to a rounded $1.35/gal.
The February ICE contract for Brent crude oil also rallied by $2.10 to settle at $48.69/bbl. The March contract rose $2.04 to $49.86/bbl. The ICE gas oil contract for January was up 25¢ to $458.50/tonne.
The average price for OPEC’s basket of 12 benchmark crudes on Jan. 14 was $41.65/bbl, up 15¢ from the previous day.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.
