The light, sweet crude oil prices for June delivery fell more than $1 on the New York market Apr. 21 to settle under $50/bbl while Brent crude oil for June delivery also fell by more than $1 to close under $52/bbl.
Both benchmark crudes had their lowest settlements since the last week of March. Both also lost nearly $4 for the week ended Apr. 21, their largest weekly declines since the week ended Mar. 10.
Last week’s price drops ended a 3-week gain in crude prices. US crude prices have held above $50/bbl for most of 2017 although light, sweet crude contracts dipped below $50/bbl during March, which analysts at the time had described as a temporary retreat.
Fereidun Fesharaki, founder and chairman of FGE, told Bloomberg that the Organization of Petroleum Exporting Countries production-cut targets have supported oil prices this year, creating a price range that is higher than it would have been otherwise.
Without OPEC, oil prices would have fallen to $30-40/bbl before rebounding higher eventually, Fesharaki said.
“What OPEC is doing is putting a band,” on oil prices of $50-60/bbl, Fesharaki said. He believes this price level is management given current world oil demand growth.
“If you can keep it in a band, and people believe that you can keep it in a band,” then people will invest in oil and gas enabling oil producers to better plan for the future, Fesharaki said. “When prices came up and down, everybody is unhappy.”
Separately, Baker Hughes Inc. said its tally of active US rigs rose by 10 to 857, up 453 units and the highest tally since Sept. 4, 2015 (OGJ Online, Apr. 21, 2017).
Energy prices
The June crude oil contract on the New York Mercantile Exchange dropped $1.09 on Apr. 21 to close at $49.62/bbl. The July contract decreased $1.10 to $49.97/bbl.
The natural gas price for May fell 6¢ to a rounded $3.10/MMbtu. The Henry Hub cash gas price was unavailable.
Heating oil for May fell 2.6¢ to a rounded $1.55/gal. That was its lowest settlement since Mar. 29. Heating oil has fallen for six consecutive trading sessions, the longest losing trend since June.
Reformulated gasoline stock for oxygenate blending for May also dropped 2.6¢ to a rounded $1.64/gal. RBOB experienced its lowest settlement since Mar. 28 and has declined in seven of eight trading sessions. It lost 9¢ for the week ended Apr. 21.
The Brent crude contract for June on London’s ICE fell $1.03 to settle at $51.96/bbl. The July contract was down $1.02 to $52.44/bbl. The May gas oil contract declined $9.25 to $467.50/tonne.
OPEC’s basket of crudes closed Apr. 21 at $49.99/bbl, down 49¢.
Contact Paula Dittrick at [email protected].
