Light, sweet crude prices managed to settle above $36/bbl, marking a gain of nearly 70¢ on the New York market Dec. 14 after touching a low of $34.53/bbl during a volatile trading session in which the day’s high was $36.70/bbl.
US natural gas futures fell 9.6¢, and the Wall Street Journal reported that was the contract’s lowest settlement since February 1992 on an inflation-adjusted basis. Analysts blamed warmed winter temperatures and low heating demand.
Barclays issued a Dec. 14 Commodities Weekly note saying weather was overshadowing all other gas fundamentals. Forecasters suggest December could prove to be the warmest December since 1950.
Current long-term forecasts indicate the 2015-16 winter could be 8% warmer than the 10-year normal, creating downside price risk for gas, Barclays said. Regarding oil price weakness, analysts pointed to the Organization of Petroleum Exporting Countries.
“Negative sentiment with regard to the current and expected state of oil market balance has intensified following OPEC’s meeting,” on Dec. 4 in Vienna, said analyst Kevin Norrish of Barclays in London.
OPEC officials said they would informally accommodate the cartel’s current production levels, which are more than 1 million b/d above the existing quota of 30 million b/d.
Energy prices
The January crude oil contract on the New York Mercantile Exchange gained 69¢ to settle Dec. 14 at $36.31/bbl. The February contract was up 35¢ to settle at $37.60/bbl.
The NYMEX natural gas contract for January fell 9.6¢ to a rounded $1.89/MMbtu. The Henry Hub gas price was $1.69/MMbtu on Dec. 14, down 8¢.
Heating oil for January delivery dropped by nearly 2¢ to a rounded $1.13/gal. The price for reformulated gasoline stock for oxygenates blending for January was down by 2.6¢ to a rounded $1.26/gal.
The January ICE contract for Brent crude edged down 1¢ to $37.92/bbl, and the February contract was down 16¢ to $38.16/bbl. The ICE gas oil contract for January was $331.25/tonne on Dec. 14, down $12.
The average price for OPEC’s basket of 12 benchmark crudes for Dec. 14 was $32.60/bbl, down $1.16.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.