MARKET WATCH: NYMEX crude oil prices resume decline

March 20, 2015
US light, sweet crude prices fell on Mar. 19 on the New York market, which analysts attributed to expectations that crude oil inventories—already at record levels for weeks—would continue to build.

US light, sweet crude prices fell on Mar. 19 on the New York market, which analysts attributed to expectations that crude oil inventories—already at record levels for weeks—would continue to build.

“If you look at the storage numbers, they just keep adding,” Oleg Girko, BBSP Partners SAS senior broker, told the Wall Street Journal. “Everybody keeps talking,” Girko noted, about the timetable for when the storage hub at Cushing, Okla., might become full.

On the international oil market outlook, Barclays Capital analysts issued a report saying the next 5 years “will bring huge changes in China’s commodity demand,” with an anticipated transition to a less investment-driven, more consumer-led economy.

The emerging China will not be as competitive in global manufacturing, but less polluting, analysts forecast.

“China’s impact on global energy markets will be transformed as its oil and coal consumption growth slows fast,” analyst Kevin Norrish said. “Investment in renewables is likely to surge, and China is likely to become much more important in global gas markets.”

Energy prices

The New York Mercantile Exchange April crude oil contract fell 70¢ on Mar. 19 to $43.96/bbl. The May contract dropped $1.12 to settle at $45.53/bbl.

The natural gas contract for April declined nearly 11¢ to a rounded $2.81/MMbtu. The Henry Hub, La., gas price was $2.85/MMbtu, up 8¢.

Heating oil for April delivery fell 5¢ to a rounded $1.72/gal. Reformulated gasoline stock for oxygenate blending for April was down by a rounded 2.5¢ to a rounded $1.77/gal.

The May ICE contract for Brent crude oil was down $1.48, settling at $54.43/bbl. The June contract lost $1.48 to $55.51/bbl. The ICE gas oil contract for April rose $2.25 to $520.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Mar. 19 was $50.17/bbl, up $1.

Contact Paula Dittrick at [email protected].

Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.