Light, sweet crude prices for June delivery dropped $1 on the New York market Apr. 21 to settle above $43/bbl, down from the session’s intraday high of $44.49/bbl during a volatile trading day, which traders attributed to economic-related comments and statistics by European and US officials.
European Central Bank Pres. Mario Draghi said European interest rates would remain at current or lower levels for an extended period, and analysts said his statement contributed to a strengthening dollar. Oil trades in dollars so a stronger dollar puts downward pressure on oil prices.
The US Department of Labor released statistics Apr. 21 showing the number of US workers applying for jobless claims at a 43-year low.
Initial jobless claims for unemployment benefits fell by 6,000 to 247,000 for the week ended Apr. 16, the DOL said, adding that is the lowest initial jobless claims stat since November 1973.
Before the economic data was released, Organization of Petroleum Exporting Countries Sec.-Gen. Abdallah Salem el-Badri said OPEC members in June might again discuss whether to freeze oil production levels at January levels.
An Apr. 17 meeting in Qatar between major producers representing both OPEC and non-OPEC countries failed to result in any agreement on a proposal to freeze production at January levels.
Analysts said they remain skeptical of the chances of a freeze agreement. Saudi Arabia wanted Iran to participate in the freeze, but Iran is building its oil production and exports since nuclear-related international sanctions were lifted in January.
Separately, China reported its crude imports during March were up 21.6% from the same time last year. Statistics showed 7.7 million b/d of oil imported during March. China is a major oil consumer so analysts watch its import numbers closely as one of many indicators of world oil demand.
Earlier this week, the US Energy Information Administration estimated US crude oil production fell to 8.95 million b/d for the week ended Apr. 15.
The International Energy Agency said overall production is falling for non-OPEC producers. IEA expects non-OPEC production will fall 700,000 b/d during 2016, which would be the largest decline in years.
“Low oil prices have started to put a brake on non-OPEC producers, US [shale] oil in particular,” Fatih Birol, IEA executive director, said in a speech Apr. 21.
Energy prices
The June crude oil contract on the New York Mercantile Exchange declined $1/bbl Apr. 21 to $43.18/bbl. The July contract was down $1.04 to $43.98/bbl.
The NYMEX natural gas contract for May dropped nearly a fraction of a penny to remain at a rounded $2.07/MMbtu. The Henry Hub price was $1.94/MMbtu, down 8¢.
Heating oil for May delivery rose dropped 3¢ to a rounded $1.30/gal. The price for reformulated gasoline stock for oxygenates blending for May climbed nearly 0.9¢ to a rounded $1.52/gal.
The Brent crude contract for June on London’s ICE was down $1.27 to $44.53/bbl. The July contract declined $1.24 to $44.39/bbl. The gas oil contract for May was $393.35/tonne, up $6.50.
The average price for the OPEC’s basket of 13 benchmark crudes on Apr. 21 was $40.11/bbl, gaining $1.65.
Contact Paula Dittrick at [email protected].
