Light, sweet oil prices and Brent crude oil prices dropped by more than $1/bbl on June 7, which analysts attributed to lingering ample world oil supplies despite production-cut targets by major producers.
US oil futures fell about $1.80/bbl for the week ended June 7 while Brent lost slightly more than $2/bbl for the week. Both crude oil benchmarks have dropped in 6 of the last 7 weeks.
Analysts noted oil prices fell on reports of rising US oil production and a stronger dollar. Oil is traded in dollars so a strengthening dollar makes oil more expensive for non-US buyers using other currencies.
The Wall Street Journal Dollar Index, which measures a group of currencies against the dollar, rose after a US employment report. The US Department of Labor said nonfarm jobs increased by a seasonally adjusted 222,000, which was more than the 174,000 economists had forecast.
Earlier in the week, the US Energy Information Administration estimated US oil production at 9.338 million b/d for the week ended July 7, up 88,000 b/d from the previous week.
Baker Hughes Inc. on June 7 reported the number of active rigs rose by 12 units to 952 for the week, its highest point since Apr. 17, 2015 (OGJ Online, July 7, 2017).
Energy prices
The August light, sweet crude contract on NYMEX dropped $1.29 on July 7 to settle at $44.23/bbl. The September contract was down $1.31 to close at $44.39/bbl.
The NYMEX natural gas price for August dropped 2.4¢ to a rounded $2.87/MMbtu. The Henry Hub cash gas price was $2.89/MMbtu, up 1¢.
Heating oil futures for August declined by 3¢ to a rounded $1.45/gal. Reformulated gasoline stock for oxygenate blending for August decreased 3¢ to a rounded $1.50/gal.
The Brent crude contract for September on London’s ICE dropped $1.42 to $46.71/bbl while the October contract was down $1.41 to $46,98/bbl. The July gas oil contract was down $18.25 to $427.75/tonne.
The Organization of Petroleum Exporting Countries’ basket of crudes on July 7 was $45.11/bbl, down $1.41.
Contact Paula Dittrick at [email protected].
