The light, sweet crude oil contract for October delivery dropped more than $1/bbl on the New York market Sept. 13 as did Brent crude oil prices on the London market on suggestions that world oil oversupply could continue longer than some analysts previously expected.
In its September Oil Market Report, the International Energy Agency said a slowdown in global oil demand growth, coupled with rising global oil production and swelling inventories, means the world oil market may take longer than expected to return to balance (OGJ Online, Sept. 13, 2016).
Separately, Libya’s National Oil Co. said it planned to restart oil shipments from terminals that had been attacked and seized by forces opposed to Tripoli’s unity government.
NOC posted a statement on its web site saying it would “begin work immediately to restart exports.”
Gen. Khalifa Haftar’s Libyan National Army claimed control over oil-exporting ports that had recently resumed operations. Fighting over the ports on Sept. 11 triggered renewed concerns among analysts and traders about possible disruptions in Libya’s oil industry (OGJOnline, Sept. 12, 2016).
The US Energy Information Administration was scheduled Sept. 14 to release its weekly inventory report. Analysts and traders expected the latest figures would make up for some of the drop reported from the previous week. Many attributed the previous drop to bad weather that delayed the arrival of oil cargoes from abroad to US ports.
US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, decreased by 14.5 million bbl for the week ended Sept. 2 compared with the previous week (OGJ Online, Sept. 7, 2016).
“A sharp rise in crude oil stocks can be expected because of the likely countermovement in terms of imports, which should weigh on oil prices in the next few days,” Commerzbank analysts said in a Sept. 14 research note.
Energy prices
The October crude oil contract on the New York Mercantile Exchange declined $1.39 on Sept. 13 to close at $44.90/bbl. The November contract was down $1.36 to $45.48/bbl.
The natural gas contract for October edged down less than a penny to remain at a rounded $2.91/MMbtu. On the spot market, the Henry Hub gas price was up 7¢ to $3.06/MMbtu.
Heating oil for October dropped nearly 2¢ to a rounded $1.43/gal. The price for reformulated gasoline stock for oxygenates blending was down 1¢ to a rounded $1.38/gal.
The November Brent crude contract on London’s ICE dropped $1.22 to settle at $47.10/bbl and the December contract declined $1.23 to settle at $47.58/bbl. The October gas oil contract settled at $416/tonne, down $9.25.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Sept. 13 was $42.91/bbl, down $1.62.
Contact Paula Dittrick at [email protected].
