Light, sweet crude oil prices for March and April delivery edged upward a few cents on the New York market Feb. 17. Analysts said a higher weekly US rig count and concerns about rising US production dampened oil-price momentum.
Baker Hughes Inc. reported the active rig count was 751, up 10 units, for the week ended Feb. 17 from the previous week (OGJ Online, Feb. 17, 2017). In the last 2 months, the count has risen by 114 units.
Oil-directed rigs increased 6 units to 597, up 281 units since May 27, 2016. At this level, the oil drilling rig count was the highest since October 2015. Units targeting natural gas rose 4 to 153, up 72 units since Aug. 26, 2016. One working rig was listed as unclassified.
Production cuts from members of the Organization of Petroleum Exporting Countries and other major producers are supporting crude prices, but market participants continue watching for signs of rising US production.
Goldman Sachs said the current rig count implied that US production will increase by an average of 130,000 b/d this year compared with 2016. The US Department of Energy reported the country’s production averaged 8.9 million b/d last year. EIA expects production will rise to 9 million b/d this year.
Delegates attending Platts Oil Forum in London said in a survey that they expect Brent oil prices will trade in a range of $55-65/bbl in 12 months, and 60% expect an oversupply in world crude oil supplies will remain during the third quarter.
Energy prices
The crude oil contract for March delivery on the New York Mercantile Exchange gained 4¢ on Feb. 17 to $53.40/bbl. The April contract was up 3¢ to $53.78/bbl.
US natural gas futures for March delivery fell 2¢ to a rounded $2.83/MMbtu. The spot gas price at the Henry Hub in Cushing, Okla., declined 7¢ to $2.75/MMbtu.
Heating oil for March edged up less a penny to a rounded $1.64/gal. Reformulated gasoline stock for oxygenate blending for March dropped nearly 1¢ to a rounded $1.52/gal.
The Brent crude contract for April on London’s ICE was up 16¢ to $55.81/bbl. The Brent May contract gained 11¢ to $56.11/bbl. Gas oil for March closed at $490/tonne, down $1.
The average price for OPEC’s basket of benchmark crudes on Feb. 17 was $53.11/bbl, down 3¢.
Contact Paula Dittrick at [email protected].