The light, sweet crude oil contract for July delivery settled just above $49/bbl on June 10 after release of the weekly US drilling rig count, which showed an increase for a second consecutive week.
Baker Hughes Inc. reported 6 rigs were added to active status for a total of 414 for the week ended June 10 (OGJ Online, June 10, 2016).
Meanwhile, world oil supplies have fallen in the last 60 days, said Barclay’s UK analyst Kevin Norrish in a June 13 Commodities Weekly note. His conclusions were based on US Energy Information Administration statistics and from a pending monthly oil market assessment to be released by the International Energy Agency.
Norrish said the drop in world oil inventories stemmed from “unexpected outages” in Nigeria and Canada, which forced a major downward revision to supply growth estimates for the second quarter.
“However, unexpected strength in demand has been just as important in driving the huge improvement in the statistical view of the oil market,” Norrish added, citing India and China as key drivers for global oil demand.
Energy prices
The July crude oil contract on the New York Mercantile Exchange fell $1.49 on June 10, settling at $49.07/bbl. The August contract fell $1.50 to $49.72/bbl.
Natural gas for July dropped 6¢ to a rounded $2.56/MMbtu on NYMEX while the Henry Hub cash price rose 10¢ to $2.41/MMbtu.
Heating oil for July delivery declined 3.5¢ to a rounded $1.52/gal. The price for reformulated gasoline stock for oxygenates blending for July dropped nearly 6¢ to a rounded $1.56/gal.
The August Brent crude contract on London’s ICE fell $1.41 to $50.54/bbl. The September contract was also down $1.41 to $51.01/bbl. The July gas oil contract settled at $451.50/tonne on June 10. The June gas oil contract expired with the June 9 settlement of $460.50/tonne.
OPEC’s basket of crudes price for June 10 was $47.05/bbl, down 97¢.
Contact Paula Dittrick at [email protected].