Crude oil prices on the New York and London markets gained modestly on June 12 with US light, sweet crude oil settling above $46/bbl while the Brent contract settled above $48/bbl pending reports on world crude oil inventories and on a weaker dollar.
The Wall Street Journal Dollar Index, which tracks the US dollar against other currencies, fell 0.12% on June 12. Oil is traded in dollars so a weaker dollar makes oil more affordable for buyers using other currencies.
The International Energy Agency was scheduled to release its monthly Oil Market Report on June 14. Market participants await that report to see if a global oil supply-demand rebalancing is happening as the Organization of Petroleum Exporting Countries has said.
UBS has cut its average 2017 forecast for light, sweet crude oil to $53/bbl, down from its earlier forecast of $55.50/bbl.
Jon Rigby, UBS head of oil research, said, “US shale players are clearly focused on delivering production growth, and plentiful capital is available.”
The US Energy Information Administration forecasts crude oil production from seven US unconventional production regions to expand 127,000 b/d month-over-month in July to average 5.475 million b/d (OGJ Online, June 12, 2017).
The Permian and Eagle Ford are forecast to account for 108,000 b/d of the increase. EIA’s monthly Drilling Productivity Report also covers the Bakken, Haynesville, Marcellus, Niobrara, and Utica plays.
Total US oil production for the week ended June 2 was 9.318 million, EIA previously estimated in its separate Weekly Petroleum Status Report.
Energy prices
The July light, sweet crude contract on the New York Mercantile Exchange gained 25¢ to $46.08/bbl on June 12. The August contract rose 25¢ to close at $46.32/bbl.
The NYMEX natural gas price for July declined 1.5¢. to a rounded $3.02/MMbtu while cash gas prices went the opposite direction. The Henry Hub cash gas price was $3.08/MMbtu, up 10¢.
Heating oil for July edged down than 1¢ to $1.42/gal. Reformulated gasoline stock for oxygenate blending for July dropped 1¢ to a rounded $1.49/gal.
The Brent crude contract for August on London’s ICE rose 14¢ to $48.29/bbl on June 12. The September contract increased 11¢ to $48.64/bbl. The June gas oil contract was $429.50/tonne on June 12, up $2.25.
OPEC’s basket of crudes on June 12 was $45.93/bbl, up 45¢.
Contact Paula Dittrick at [email protected].
