Light, sweet crude oil climbed modestly on the New York Mercantile Exchange May 22 with the June contract settling well above $50/bbl and the July contract settling above $51/bbl. It was the second consecutive day the front-contract contract settled above $50/bbl.
The Organization of Petroleum Exporting Countries is scheduled to meet May 25 to discuss whether to extend the existing production-cut targets. Even as some OPEC delegates started arriving in Vienna, Saudi Arabia Energy Minister Khalid al-Falih flew to Baghdad on May 22.
Iraqi officials said they are concerned about extending the output cuts for 9 months as advocated by Saudi Arabia and non-OPEC Russia. Iraq oil officials are pushing for a 6-month extension.
Oil prices rose recently upon news reports of a possible 9-month extension. Light, sweet crude had briefly dipped below $44/bbl during May 5 trading on uncertainty about the production agreement between OPEC and non-OPEC members.
The production-cut targets started in January. The US benchmark traded in a range of $50-54/bbl for much of the year through April.
Meanwhile, US President Donald Trump has proposed selling about half of the Strategic Petroleum Reserve over 10 years starting in October 2018. Analysts say this would counteract inventory-reduction efforts by OPEC and some major non-OPEC producers.
Energy prices
The June light, sweet crude contract on NYMEX climbed 40¢ on May 22 to close at $50.73/bbl. The July contract rose 46¢ to settle at $51.13/bbl.
The natural gas price for June increased 7¢ to a rounded $3.33/MMbtu. The Henry Hub cash gas price was $3.21/MMbtu, up 62¢.
Heating oil for June gained nearly 2¢ to a rounded $1.60/gal. Reformulated gasoline stock for oxygenate blending for June gained 1¢ to a rounded $1.66/gal.
The Brent crude contract for July on London’s ICE gained 26¢ to $53.87/bbl. The August contract was up 35¢ to $54.11/bbl. The June gas oil contract was $479/tonne, up $5.25.
OPEC’s basket of crudes on May 22 settled at $51.50/bbl, up 63¢.
Contact Paula Dittrick at [email protected].