US light, sweet crude prices dropped more than $1/bbl on Aug. 14, setting below $47.60 while Brent crude oil prices also fell more than $1/bbl to settle below $51/bbl.
“Shale is still rising strongly,” Olivier Jakob, Petromatrix oil analyst, said of US unconventional oil production. He said oil investors question whether the US benchmark can “move above $50, with the capacity how it is in the US.”
The US government issued its unconventional production forecast, saying shale oil production is expected to rise during September (OGJ Online, Aug. 14, 2017).
Crude oil production from the seven major US onshore producing regions is forecast to increase 117,000 b/d month-over-month in September to 6.149 million b/d, according to the US Energy Information Administration’s latest Drilling Productivity Report.
Natural gas production from the regions is seen climbing 929 MMcfd during the month to 59.426 bcfd.
Separately, BMI Research, a FitchGroup Co., said world oil prices will strengthen from current levels during the second quarter.
BMI Research believes oil prices will be supported by “strong compliance to production cuts, slower supply side growth, and a seasonal uptick in global crude and fuels demand. Large supply additions will keep prices broadly flat in 2018.”
The Organization of Petroleum Exporting Countries and some non-OPEC producers have agreed to production-cut targets through first-quarter 2018.
Energy prices
The September light, sweet crude contract on the New York Mercantile Exchange dropped $1.23 on Aug. 14 to settle at $47.59/bbl. The October contract was down $1.24 to close at $47.73/bbl.
The NYMEX natural gas price for September dropped more than 2¢ to a rounded $2.96/MMbtu. The Henry Hub cash gas price rose 5¢ to $2.96/MMbtu.
Heating oil for September was down 3¢ to remain at a rounded $1.60/gal. Reformulated gasoline stock for oxygenate blending for September declined 3.6¢ to a rounded $1.58/gal.
The Brent crude contract for October on London’s ICE was down $1.37 to $50.73/bbl. The November contract also was down $1.31 to $50.63/bbl.
The August gas oil contract rose $1 to $483.50/tonne. OPEC’s basket of crudes on Aug. 14 was not immediately available.
Contact Paula Dittrick at [email protected].
