Light, sweet crude oil prices hovered above $50/bbl on the New York market Oct. 3, settling down by more than a dime. Meanwhile Brent crude oil prices in London also fell with the December contract settling at $56/bbl.
Some analysts say oil price gains during September could become self-defeating if higher prices trigger increased US shale production. Oil gained last month on strong demand expectations and on geopolitical concerns.
Oil prices rose following suggestions that the Iraqi Kurdish independence referendum could interrupt the flow of oil. Turkey has threatened to close a pipeline.
“We think the demand forecasts are, perhaps, a little too optimistic and as a result we are left with all the bearish factors that come from the supply side,” said Harry Tchilinguirian, BNP Paribas head of commodity strategy. He anticipates US oil supply growth.
Commerzbank analysts said they expect US production will rise to more than 9.6 million b/d yet this year, which would be its highest level since 1970. Commerzbank cited rising US rig counts, an indicator of future production.
The US Energy Information Administration was scheduled Oct. 4 to realize its weekly oil and products inventory.
Energy prices
The November light, sweet crude contract on the New York Mercantile Exchange decreased 16¢ to settle at $50.42/bbl on Oct. 3. The December contract dropped 16¢ to settle at $50.74/bbl.
The NYMEX natural gas price for November dropped 2¢ to $2.89/MMbtu. The Henry Hub cash gas price fell 9¢ to $2.72/MMbtu.
Heating oil for November was down 1.6¢ to a rounded $1.75/gal. The NYMEX reformulated gasoline blendstock for October rose 1¢ to $1.56/gal on Oct. 3.
The Brent crude contract for December on London’s ICE dropped 12¢ to $56/bbl. The January contract was down 11¢ to $55.78/bbl. The gas oil contract for October was $526.50/tonne, down $4.50.
The Organization of Petroleum Exporting Countries’ basket of crudes for Oct. 3 was $54.29/bbl, down 32¢.
Contact Paula Dittrick at [email protected].
