Light, sweet crude oil for April declined moderately on the New York market to close under $48/bbl Mar. 14 while Brent crude oil for May also fell on the London market to below $51/bbl. Oil prices were rising Mar. 15 pending release of the weekly US oil and product inventory report.
The US Energy Information Administration was scheduled to release its Petroleum Status Report. Separately, the American Petroleum Institute estimated a 531,000-bbl decline in US crude supplies for the week ended Mar. 10.
World oil supplies rose 260,000 b/d in February to 96.52 million b/d, the International Energy Agency said Mar. 15, noting increased production from both the Organization of Petroleum Exporting Countries and non-OPEC producers.
IEA said OPEC production rose by 170,000 b/d in February to 32 million b/d. This equates to 91% compliance with the cartel’s promised production cuts for February, the agency said, noting revised figures for January showed an 105% OPEC compliance.
Saudi Arabia production in February rose by 180,000 b/d from January to 9.98 million b/d, which was below its 10.06 million b/d target. Saudi January production was revised to 9.8 million b/d, IEA said.
Saudi Arabia’s production increased, which suggests the Saudis are running out of patience with other OPEC producers slow approach to fulfilling promised production cuts, Citi Research said in a report.
This could be seen as “a signal to other members of the output agreement that free-riders won’t be tolerated,” Citi Research analysts suggested.
Russian February oil production was 11.478 million b/d, the IEA estimated. That level was a cut of 119,000 b/d, which amounts to a 40% compliance with the 300,000 b/d cut that Russia had promised OPEC.
Oil market participants also await a Mar. 15 announcement from the US Federal Reserve following conclusion of a 2-day policy meeting. The Fed was widely expected to raise interest rates during March.
Energy prices
The crude oil contract for April delivery on the New York Mercantile Exchange fell 68¢ on Mar. 14 to $47.72/bbl. The May contract declined 59¢ to $48.35/bbl.
The natural gas price for April dropped 10¢ to a rounded $2.94/MMbtu. The Henry Hub cash gas price closed at $3.04/MMbtu, down 2¢.
Heating oil for April edged down nearly 1¢ to a rounded $1.49/gal. Reformulated gasoline stock for oxygenate blending for April nudged up slightly to remain at a rounded $1.58/gal.
The Brent crude contract for May on London’s ICE declined 43¢ to $50.92/bbl. The June contract lost 48¢ to $51.11/bbl. The gas oil contract settled at $448/tonne on Mar. 14. The gas oil settlement for Mar. 13 was unavailable.
The average price for OPEC’s basket of benchmark crudes on Mar. 14 was $48.63/bbl, down 37¢.
Contact Paula Dittrick at [email protected].