Light, sweet crude oil prices for May delivery fell on Mar. 22 to settle just above $48/bbl on the New York market while Brent crude for May delivery also dropped to settle below $51/bbl in London.
Crude oil prices fell after the US Energy Information Administration reported commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 5 million bbl for the week ended Mar. 17 to 533.1 million bbl (OGJ Online, Mar. 23, 2017).
The Petroleum Status Report also showed that US production increased 20,000 b/d to 9.129 million b/d for the week ended Mar. 17 compared with the previous week. All the gains came from the Lower 48 while Alaska’s production held steady at 528,000 b/d.
Tudor, Pickering, Holt & Co. International cited rising US production while reducing its earlier crude oil price forecasts. For this year’s second half, the investment bank reduced its price estimate $10 to $62.50/bbl.
Tudor also revised downward its forecast for the average 2018 light, sweet crude oil price to $65/bbl.
Regarding world oil markets, ratings agency Fitch downgraded Saudi Arabia’s credit rating but maintained a stable outlook. Fitch analysts cited concerns that the world’s largest oil exporter could struggle to diversify its economy.
Various Middle Eastern oil exporters, including Saudi Arabia, have responded to the oil price slump that started in late 2014 by announcing economic reforms intended to reduce national dependence on oil revenues.
“The fundamentals of the Saudi economy remain strong,” said Saudi Arabia Minister of Finance Mohammed Al-Jadaan in response to the credit downgrade.
Energy prices
The crude oil contract for May delivery on the New York Mercantile Exchange dropped 20¢ on Mar. 22 to $48.04/bbl while the June contract fell 24¢ to $48.58/bbl.
The natural gas price for April fell 8¢ to a rounded $3.01/MMbtu. The Henry Hub cash gas price closed at $2.93/MMbtu, down 13¢.
Heating oil for April fell by less than 1¢ to a rounded $1.50/gal. Reformulated gasoline stock for oxygenate blending for April also fell less than a penny to a rounded $1.60/gal.
The Brent crude contract for May on London’s ICE decreased 32¢ to $50.64/bbl. The June contract dropped 32¢ to $50.87/bbl. The gas oil contract settled at $447/tonne on Mar. 22, down $6.25.
The average price for OPEC’s basket of benchmark crudes on Mar. 23 was $49.23/bbl, down 95¢.
Contact Paula Dittrick at [email protected].
