The light, sweet crude oil contract for November dropped modestly to settle below $50/bbl on the New York market Oct. 4 after reports showed rising US oil production and higher US oil exports.
The US Energy Information Administration reported Oct. 5 that US oil production reached 9.56 million b/d for the week ended Sept. 29—its highest level since July 2015.
The Weekly Petroleum Status Report said oil production across the Lower 48 held unchanged at 9.064 million b/d while Alaska’s production rose 14,000 b/d to 497,000 b/d last week. Meanwhile, US crude exports were nearly 2 million b/d.
Saudi Arabian King Salman met with Russian President Vladimir Putin in Moscow Oct. 5 to discuss Russia’s participation in the production-cut targets by the Organization of Petroleum Exporting Countries and other major producers, including Russia.
Analysts expect Russia will continue its role in the production-cut targets, which extend through March 2018. The targets call for producers to cut 1.8 million b/d total compared with late 2016 production levels.
Miswin Mahesh, Energy Aspects analyst, said market participants are comparing OPEC’s cuts with how much crude oil the US can export. He believes current US crude export levels are unsustainable given logistical constraints.
Carsten Fritsch, Commerzbank commodities analyst in Frankfurt, said, “OPEC and Russia are talking about extending production limits, but there’s still plenty of supply with US crude exports up sharply.”
EIA said crude inventories, excluding the Strategic Petroleum Reserve, fell 6 million bbl for the week ended Sept. 29 to 465 million bbl, which is near the upper limit of the average range for this time of year (OGJ Online, Oct. 4, 2017).
Energy prices
The November light, sweet crude contract on the New York Mercantile Exchange decreased 44¢ to settle at $49.98/bbl on Oct. 4. The December contract dropped 42¢ to settle at $50.32/bbl.
The NYMEX natural gas price for November gained 4.5¢ to $2.94/MMbtu. The Henry Hub cash gas price rose 9¢ to $2.81/MMbtu.
Heating oil for November was up 2¢ to a rounded $1.77/gal. The NYMEX reformulated gasoline blendstock for October rose 1.5¢ to $1.58/gal on Oct. 4.
The Brent crude contract for December on London’s ICE dropped 20¢ to $55.80/bbl. The January contract was down 18¢ to $55.60/bbl. The gas oil contract for October was $528.25/tonne, up $1.75.
OPEC’s basket of crudes for Oct. 4 was $53.93/bbl, down 36¢.
Contact Paula Dittrick at [email protected].
