US light, sweet crude oil futures for June fell more than $1 to settle under $48/bbl May 2 on the New York market while Brent crude oil prices in London fell more than a $1 to settle below $51/bbl.
Brent briefly dipped to $50/bbl during electronic trading overnight, which Commerzbank analysts called “its lowest level since the end of March.”
The US and Brent benchmarks dropped as Libya accelerates oil production again. Meanwhile, uncertainty remains about the duration of production-cut targets by major producers.
Some analysts suggest the US benchmark oil price could dive to $40/bbl if major producers were to refuse to extend production-cut targets that started in January. The Organization of Petroleum Exporting Countries meets in Vienna on May 25 to decide whether to extend its production-cut targets.
Most analysts expect major producers will decide to maintain production targets for another 6 months. OPEC members and some non-OPEC producers agreed last year to cut production by a total 1.8 million b/d in efforts to reduce world oil inventories and support oil prices.
Energy prices
The light, sweet contract for June crude oil delivery dropped $1.18 on May 2 to close at $47.66/bbl on the New York Mercantile Exchange. The July contract fell $1.17 to settle at $47.99/bbl.
The natural gas price for June decreased 2¢ to a rounded $3.20/MMbtu. The Henry Hub cash gas price fell 6¢ to at $3.11/MMbtu on May 2.
Heating oil for June dropped nearly 2¢ to settle at $1.47/gal. Reformulated gasoline stock for oxygenate blending for June also fell 1.4¢ to a rounded $1.51/gal.
The Brent crude contract for July on London’s ICE dropped $1.06 to settle at $50.46/bbl. The August contract dropped $1.10 to $50.76/bbl. The May gas oil contract fell $1 to $447/tonne.
OPEC’s basket of crudes was $48.97/bbl on May 2, down 18¢.
Contact Paula Dittrick at [email protected].