Light, sweet crude oil for October delivery dropped modestly to settle below $49.50/bbl on Sept. 19 as traders and analysts awaited release of the weekly US government report on oil and product inventories on Sept. 20.
Speaking in the UAE on Sept. 19, Iraqi Oil Minister Jabar al-Luaibi suggested Iraq and other members of the Organization of Petroleum Exporting Countries will consider a proposal for the cartel’s production-cut targets to be extended throughout 2018.
OPEC and some non-OPEC producers agreed to cap production at about 1.8 million b/d lower than October 2016 levels in efforts to reduce world oil supplies and increase prices. The targets took effect in January. The agreement was extended this year through March 2018.
“OPEC will have no choice but to consider extending the production cuts beyond March 2018,” Commerzbank analysts said in a Sept. 20 note. “Any increase in the production from the spring of 2018 would…generate renewed oversupply in the oil market and put prices under pressure.”
OPEC and non-OPEC participants are scheduled to meet in Vienna Sept. 22 to review compliance with the targets. Most analysts suggest that any decision to extend the targets would not happen until OPEC’s official annual meeting in November.
Energy prices
The October light, sweet crude contract on the New York Mercantile Exchange declined 43¢ to settle at $49.48/bbl on Sept. 19. The November contract dropped 45¢ to settle at $49.90/bbl.
The NYMEX natural gas price for October fell 2¢ to $3.12/MMbtu. The Henry Hub cash gas price climbed 4¢ to $3.14/MMbtu.
Heating oil for October fell less than 1¢ to a rounded $1.77/gal. The NYMEX reformulated gasoline blendstock for October also dropped about 1¢ to $1.66/gal on Sept. 18.
The Brent crude contract for November on London’s ICE fell 34¢ to $55.14/bbl. The December contract declined 35¢ to $54.90/bbl. The gasoil contract for October was $528.50/tonne, up $3.50.
OPEC’s basket of crudes for Sept. 19 was $53.81/bbl, up 3¢.
Contact Paula Dittrick at [email protected].
