Light, sweet crude oil for the November contract gained modestly, settling above $50/bbl on Sept. 22 for a third consecutive day. Oil prices continued rising on Sept. 25 after some officials from the Organization of Petroleum Exporting Countries said production agreements were rebalancing the world oil supply-demand situation.
Kuwait Oil Minister Essam al-Marzouq, who chaired a Sept. 22 meeting in Vienna of the Joint Ministerial Monitoring Committee, said existing production-cut targets were helping return world crude oil inventories to the 5-year average.
OPEC, Russia, and several other producers cut production by about 1.8 million b/d starting in January compared with October 2016 levels.
The existing production-cut targets expire Mar. 31, 2018. Some ministers suggested a decision on extending the production-cut targets could be taken before the end of this year. Russian officials have said they expect no such action before 2018.
The spread between Brent and the US light, sweet crude oil was $6.20/bbl as of the Sept. 22 closing, marking the widest spread since US officials lifted a ban on oil exports nearly 2 years ago, said JBC Energy analysts.
In a Sept. 25 research note, JBC analysts said they expect the wide spread will trigger record crude oil exports from the Gulf Coast, which will consequently cause a narrowing of the price gap between the two crude benchmarks.
Energy prices
The November light, sweet crude contract on the New York Mercantile Exchange increased 11¢ to settle at $50.66/bbl on Sept. 22. The December contract gained 10¢ to settle at $51.03/bbl.
The NYMEX natural gas price for October gained 1¢ to a rounded $2.96/MMbtu. The Henry Hub cash gas price fell 16¢ to $2.95/MMbtu.
Heating oil for October edged up less than 1¢ to a rounded $1.82/gal. The NYMEX reformulated gasoline blendstock for October gained nearly 2.5¢ to a rounded $1.67/gal on Sept. 21.
The Brent crude contract for November on London’s ICE gained 43¢ to $56.86/bbl. The December contract increased 33¢ to $56.42/bbl. The gasoil contract for October was $541.50/tonne, up 25¢.
OPEC’s basket of crudes for Sept. 22 was $54.84/bbl, up 25¢.
Contact Paula Dittrick at [email protected].