The contract for US light, sweet crude oil for April delivery rose more than $1/bbl Feb. 27, and analysts said February marked the first monthly gain for crude oil on the New York market since June 2014.
A Reuters survey of analysts showed respondents believe oil prices probably have reached bottom in this downturn and will recover during this year’s second half.
Brent crude prices gained more than $2/bbl on Feb. 27, and the Brent premium to US, light sweet crude for April delivery was $12.82/bbl—the highest that it has been since January 2014.
China and Japan, two major Asian oil producers, have both reported slow economic growth, which hinders oil demand growth. The final February statistics for China HSBC Manufacturing Purchasing Managers’ Index were scheduled to be released Mar. 2.
The Business Monitor International said Japan’s crude oil futures traded on the Tokyo Commodity Exchange Inc. (TOCOM) are expected to remain at a discount to Brent crude oil prices. TOCOM crude prices act as a benchmark price for Middle East crude oil.
“This price war could become more aggressive and extended particularly if refinery strikes in the US are prolonged,” BMI said.
Meanwhile, Shell Oil Co., lead negotiator for oil companies in contract discussions with the United Steelworkers union, said talks were to resume on Mar. 4.
Energy prices
The New York Mercantile Exchange April crude oil contract was up $1.59 to $49.76/bbl Feb. 27 while the May contract increased $1.75 to $52.14/bbl.
The natural gas contract for April gained 3.7¢ to a rounded $2.73/MMbtu. The Henry Hub, La., gas price was $2.77/MMbtu, down 34¢.
Heating oil for March rose 16¢ to a rounded $2.30/gal. Reformulated gasoline stock for oxygenate blending for March delivery climbed 6¢ to a rounded $1.77/gal.
The April ICE contract for Brent crude oil rose $2.53, settling at $62.58/bbl. The May contract was up $2.44 to $63.15/bbl. The ICE gas oil contract for March gained $8 to $593.75/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Feb. 27 was $56.83/bbl, up 76¢.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.
