Light, sweet crude oil prices closed above $54.50/bbl on the New York market Nov. 2, marking the near-month’s highest settlement since July 2015 while Brent crude oil prices in London held above $60/bbl.
The oil benchmarks are being supported by political issues in northern Iraq and by debt problems in Venezuela, analysts said.
Iraqi central government troops have fought with forces from semiautonomous Kurdistan, disrupting crude production and exports after the Kurds voted to secede from Iraq in a nonbinding referendum. The vote was in late September.
Separately, analysts are watching how Venezuela handles its debt problem. Venezuela President Nicolas Maduro announced plans to make a $1.1-billion principal payment Nov. 3 for a bond issued by state-owned oil company Petroleos de Venezuela SA.
Maduro also said he will seek a voluntary restructuring of the country’s remaining debt.
The Organization of Petroleum Exporting Countries and some non-OPEC producers, including Russia, are expected to extend production-cut targets set to expire in March 2018.
Harry Tchilinguirian, BNP Paribas global head of commodity markets strategy, expects OPEC will extend the production-cut targets through yearend 2018. Production will be discussed during OPEC’s Nov. 30 meeting in Vienna.
Tchilinguirian said “an extension is the likely path of least resistance,” but he also expects producers’ compliance with pledged cuts will fall in second-half 2018.
Energy prices
The December light, sweet crude contract on the New York Mercantile Exchange increased 24¢ to $54.54/bbl on Nov. 2. The January 2018 contract rose 26¢ to $54.77/bbl.
The NYMEX natural gas price for December climbed 4¢ to $2.93/MMbtu. The Henry Hub cash gas price for Nov. 2 was $2.69/MMbtu, up 5¢.
Heating oil for December edged down less than 1¢ to $1.85/gal. The NYMEX reformulated gasoline blendstock for December jumped nearly 3¢ to a rounded $1.77/gal.
The Brent crude contract for January 2018 on London’s ICE gained 13¢ to $60.62/bbl. The February 2018 contract increased 14¢ to $60.37/bbl. The gas oil contract for November was down $6 to $554.50/tonne.
OPEC’s Nov. 2 basket of crudes price was down 74¢ to $58.49/bbl.
Contact Paula Dittrick at [email protected].
