Light, sweet crude oil for April delivery edged down on the New York market Mar. 16 to settle below $49/bbl while Brent crude oil for May delivery also dropped slightly to settle below $52/bbl on the London market.
Oil prices remained near a 3-month low from early in the week, which analyst attributed to concerns about lingering world crude oil supply and how quickly that supply might drop given targeted production cuts by members of the Organization of Petroleum Exporting Countries and other major producers.
Saudi Energy Minister Khalid al-Falih told the Wall Street Journal in an interview Mar. 15 that OPEC has a “strong willingness” to extend the production cuts beyond 6 months. The cuts started in January after producers reached production-cut targets in late 2016.
“My conversation with colleagues from OPEC and outside OPEC gives me a high degree of confidence that the impressive performance we have seen will improve,” al-Falih said of compliance with production cuts.
Ole Hansen, head of commodity strategy for Saxo Bank, said crude oil price volatility this week slowed upon “soothing comments from Saudi Arabia and the first, albeit small, US oil inventory drop this year. Sentiment in the oil market remains fragile at this stage, with OPEC potentially being forced to extend its current production cuts beyond 6 months to achieve its goal of balancing the market.”
Energy prices
The crude oil contract for April delivery on the New York Mercantile Exchange dropped 11¢ on Mar. 16 to $48.75/bbl. The May contract fell 14¢ to $49.24/bbl.
The natural gas price for April dropped 8¢ to a rounded $2.90/MMbtu. The Henry Hub cash gas price closed at $2.85/MMbtu, down 15¢.
Heating oil for April edged down less than 1¢ to a rounded $1.50/gal. Reformulated gasoline stock for oxygenate blending for April edged up 1¢ to remain at a rounded $1.59/gal.
The Brent crude contract for May on London’s ICE decreased 7¢ to $51.74/bbl. The June contract also fell by 7¢ to $51.90/bbl. The gas oil contract settled at $455/tonne on Mar. 16, unchanged from the previous settlement.
The average price for OPEC’s basket of benchmark crudes on Mar. 16 was $49.70/bbl, up 53¢.
Contact Paula Dittrick at [email protected].
