Oil prices rose modestly on the New York market Dec. 15 and continued mildly higher in early Dec. 18 trading on a slight decline in the number of US drilling rigs working.
The US rig count fell by 1 unit to 930 rigs for the week ended Dec. 15, Baker Hughes reported in its weekly rig count (OGJ Online, Dec. 15, 2017).
Rigs targeting oil fell 4 units to 747. Rigs targeting gas reached 183 units, up 3 for the week ended Dec. 15.
Some members of Organization of Petroleum Exporting Countries were alarmed last week as Brent briefly rose above $65/bbl for the first time since June 2015 before closing lower.
Brent’s recent highest settlement was nearly $64.70/bbl on Dec. 11, but the Dec. 15 front-month close was under $61.50/bbl. Analysts attributed Brent’s brief rally to the temporary shutting of the Forties Pipeline System for repairs.
Ole Hansen, head of Saxo Bank commodity strategy, said higher oil prices “would be an open invitation to cheat” on agreed production-cut targets. “That could lead to a collapse of the deal.”
Some OPEC members are concerned about non-OPEC Russia, which led a group of countries in alliance with OPEC helping to cut production. Russian oil companies reportedly want to benefit from rising crude prices.
“Do we want [prices] to continue upwards indefinitely? Not really,” Nigerian Oil Minister Emmanuel Ibe Kachikwu told the Wall Street Journal, citing US shale production as a concern.
Energy prices
The January 2018 light, sweet crude contract on the New York Mercantile Exchange rose 26¢ on Dec. 15 to $57.30/bbl. The February contract increased 25¢ to $57.33/bbl.
The NYMEX natural gas price for January 2018 dropped by 7¢ to a rounded $2.61/MMbtu. Meanwhile, the Henry Hub cash gas price was down 5¢ at $2.62/MMbtu.
Ultralow-sulfur diesel for January 2018 edged up down than a penny to a rounded $1.90/gal. The NYMEX reformulated gasoline blendstock for January 2018 fell 1.6¢ to a rounded $1.65/gal.
The Brent crude contract for February 2018 on London’s ICE dropped 8¢ to $63.23/bbl. The March 2018 contract dropped 1¢ to $62.65/bbl.
The gas oil contract for January was $564/tonne, up $2.25.
OPEC’s basket of crudes was $61.48/bbl on Dec. 15, down 61¢.
Contact Paula Dittrick at [email protected].
