The light, sweet crude oil price contract for November delivery gained modestly on Oct. 18 but fell in early Oct. 19 trading during a week characterized by mixed energy trading, which analysts attribute largely to rising political tensions in the Middle East.
Harry Tchilinguirian, BNP Paribas global head of commodity markets strategy, said, “This move is more symptomatic of something we have been seeing over the past week—the market is having trouble moving higher.”
Meanwhile, Algeria representatives indicated support on Oct. 18 for the Organization of the Petroleum Exporting Countries to extend its production-cut targets for a second time.
“I think it is desirable and probable to conduct an extension,” Abdelmoumen Ould Kaddour, chief executive of Algeria’s Sonatrach state oil company, told the Wall Street Journal from the sidelines of the Oil & Money Conference in London.
OPEC and some non-OPEC producers, including Russia, agreed to cap their production at about 1.8 million b/d lower than October 2016 levels. In May, the agreement was extended through March 2018. OPEC is expected to discuss another extension at its November meeting in Vienna.
Tamas Varga, analyst at London brokerage PVM Oil Associate, expects OPEC will extend the targets for another 9 months.
The US Energy Information Administration reported crude inventories fell by 5.7 million bbl for the week ended Oct. 13 to 456.5 million bbl, which is near the upper limit of the average range for this time of year (OGJ Online, Oct. 18, 2017).
The Weekly Petroleum Status Report said US oil production dipped 11% from the previous week to 8.4 million b/d, its lowest since June 2014. The production decline was attributed to hurricanes and tropical weather in the Gulf of Mexico.
Production across the Lower 48 states was 7.894 million b/d for the week ended Oct. 13, down 1.083 million b/d. Alaska production was up 9,000 b/d last week to 512,000 b/d.
Energy prices
The November light, sweet crude contract on the New York Mercantile Exchange rose 16¢ to $52.04/bbl on Oct. 18. The December contract was up 15¢ to $52.26/bbl.
The NYMEX natural gas price for November fell nearly 11¢ to a rounded $2.85/MMbtu. The Henry Hub cash gas price was $2.81/MMbtu, down 8¢.
Heating oil for November edged down less than a penny to $1.80/gal. The NYMEX reformulated gasoline blendstock for November rose 1¢ to a rounded $1.64/gal.
The Brent crude contract for December on London’s ICE climbed 27¢ to $58.15/bbl. The January contract was up 26¢ to $57.80/bbl. The gas oil contract for November was $533/tonne, down $4.25.
OPEC’s basket of crudes for Oct. 18 was $56.12/bbl, up 29¢.
Contact Paula Dittrick at [email protected].