The light, sweet crude oil price rose slightly on the New York market Oct. 20 but settled below $52/bbl. The Brent December crude oil in London rose modestly to settle at $57.75/bbl, which analysts said stemmed from disruptions to production from northern Iraq.
Clashes between Iraqi government troops and forces from the semiautonomous Kurdish region disrupted some oil production and exports last week. News accounts indicate that Iraqi forces retook the oil-rich Kirkuk area from Kurdish fighters.
The central government of Iraq opposes a move toward autonomy by the Kurds, who voted in favor of independence in a September nonbinding referendum. Since then, Iran and Turkey have sided with the Iraq’s central government in travel restrictions and other measures.
Iraq recently said it would increase oil production in southern Iraq to offset losses from the northern Kurdish region.
Spare oil production capacity in the US and in member countries within the Organization of Petroleum Exporting Countries makes it difficult for Brent to go above $60/bbl, said Olivier Jakob, Petromatrix managing director.
Commerzbank said the market is responding mostly to price-supportive news, particularly the potential for supply disruptions. But Commerzbank analysts believe the prices of both the NYMEX and Brent crudes benchmarks “are overheated and [we] expect them to correct in the short term.”
Separately, Baker Hughes reported on Oct. 20 a third-straight decline in the number of active US oil rigs. The US rig count during the week ended Oct. 20 fell 15 units to 913. US oil-directed rigs dropped for the eighth time in 10 weeks, shedding 7 units to 736 (OGJ Online, Oct. 20, 2017).
Energy prices
The November light, sweet crude contract on the New York Mercantile Exchange rose 18¢ to $51.47/bbl on Oct. 20. The December contract was up 33¢ to $51.84.
The NYMEX natural gas price for November rose 4¢ to $2.91/MMbtu. The Henry Hub cash gas price fell 4¢ to $2.77/MMbtu.
Heating oil for November gained nearly 3¢ to a rounded $1.80/gal. The NYMEX reformulated gasoline blendstock for November rose 3¢ to $1.67/gal.
The Brent crude contract for December on London’s ICE climbed 52¢ to $57.75/bbl. The January contract was up 60¢ to $57.58/bbl. The gas oil contract for November was $533/tonne, up $3.75.
OPEC’s basket of crudes for Oct. 20 was $55.41/bbl, down 11¢.
Contact Paula Dittrick at [email protected].
