Crude oil prices rose on the New York market Aug. 4 as did Brent crude oil prices in London pending a 2-day gathering in Abu Dhabi where technical experts are discussing the Organization of Petroleum Exporting Countries’ production compliance.
Analysts said the price support followed an Aug. 4 US employment report and the Baker Hughes weekly rig count for US rigs. Baker Hughes’ tally of active rigs dropped 4 units to 954 during the week ended Aug. 4 (OGJ Online, Aug. 4, 2017).
The Abu Dhabi meeting started Aug. 7. OPEC agreed in late 2016 to cut cartel oil production by 1.2 million b/d to 32.5 million b/d starting Jan. 1. Also in late 2016, some non-OPEC countries vowed to cut oil output by 558,000 b/d, with Russia saying it would cut its production by 300,000 b/d.
The production-cut targets have since been extended into 2018. The goal was to diminish ample world oil inventories in support of oil prices. But US oil production continues to rise.
Market participants are watching the Abu Dhabi meeting results to see if Libya will join the agreement to cap output. Both Libya and Nigeria were exempted from the initial deal because repeated militant attacks consistently reduced each country’s production previously.
Nigeria previously said it was willing to consider participating in the production-cut targets. But Nigeria has no set timeframe to join OPEC oil production-cut targets.
“Hopefully in the next 2-3 months, we can see how predictable the production return has been and then can say we feel stabilized and need to make the corresponding cuts,” Nigeria Oil Minister Emmanuel Ibe Kachikwu told Reuters in July.
Nigeria’s benchmark to join the OPEC cuts is 1.8 million b/d, and the country’s level as of July was 1.7 million b/d, excluding condensates, Kachikwu said.
S&P Global Platts said the combined July output of Libya and Nigeria production was 590,000 b/d above a baseline that OPEC and non-OPEC participants used to determine production-cut targets. OPEC is scheduled to release its own monthly report on Aug. 10.
Energy prices
The September light, sweet crude contract on the New York Mercantile Exchange increased 55¢ on Aug. 4 to settle at $49.58/bbl. The October contract rose 54¢ to close at $49.73/bbl.
The NYMEX natural gas price for September dropped 2.6¢ to $2.77/MMbtu. The Henry Hub cash gas price fell 2¢ to $2.76/MMbtu.
Heating oil for September was up less than a penny to a rounded $1.65/gal. Reformulated gasoline stock for oxygenate blending for September gained 1.4¢ to a rounded $1.65/gal.
The Brent crude contract for October on London’s ICE increased 41¢ to $52.42/bbl. The November contract was up 44¢ to $52.46/bbl.
The August gas oil contract fell $4.50 to $488.50/tonne. OPEC’s basket of crudes on Aug. 4 was $49.94/bbl, down 30¢.
Contact Paula Dittrick at [email protected].
