Light, sweet crude oil prices on the New York Mercantile Exchange declined early on Aug. 21 after ending the previous week on a surge driven by a weaker dollar and falling US rig count.
Hans van Cleef, senior energy economist at ABN Amro, said the market is “currently seeing some profit-taking after [Aug. 18’s] strong rally ahead of this week’s inventory data.”
Baker Hughes’ count of active US oil-directed rigs weighed down the overall rig count last week with a 5-unit drop to 763—their largest decline since January (OGJ Online, Aug. 18, 2017). The count is unchanged from July 7 but remains up 447 since its bottom on May 27, 2016.
The end of US drilling growth and plunging US oil inventories haven’t been enough to overcome lingering doubts that the oil market is near rebalance. US crude production continues to rise and compliance has slipped over the last 2 months in a deal within the Organization of Petroleum Exporting Countries to curb output.
OPEC is scheduled to convene with nonmembers that are part of the agreement in an Aug. 21 joint technical committee meeting in Vienna, where the parties will continue to discuss compliance.
OPEC and select non-OPEC countries have agreed to collectively curtail output by about 1.8 million b/d through March 2018.
Energy prices
The September and October light, sweet crude contracts on NYMEX each jumped $1.42 on Aug. 18 to $48.51/bbl and $48.66/bbl, respectively.
The NYMEX natural gas price for September declined 3.6¢ to a rounded $2.89/MMbtu. The Henry Hub cash gas price was $2.89/MMbtu, up a penny.
Heating oil for September increased 3.8¢ to a rounded $1.62/gal. Reformulated gasoline stock for oxygenate blending for September was up 3.7¢ to a rounded $1.62/gal.
The Brent crude contract for October on London’s ICE rose $1.69 to $52.72/bbl. The November contract gained $1.66 to $52.41/bbl. The September gas oil contract gained $7.50 to $472.25/tonne.
OPEC’s basket of crudes on Aug. 18 was $48.86/bbl, up 79¢.
