Brent crude oil prices reached a 3-year high on the London market Jan. 4, which analysts attributed to declining US crude supplies and possible risk to world oil supplies caused by protests in Iran.
Brent reached a trading session high of $68.27/bbl on Jan. 4 before retreating to settle at $68.07/bbl. The trading session’s peak was Brent’s highest price since May 2015.
Royal Bank of Canada analyst Al Stanton said, “Brent’s surge to $68/bbl has stimulated interest in the sector. We consider current oil prices to be a windfall, and a chance for producers to hedge 2018 volumes at greater than $60/bbl.”
Oil prices fell in early Jan. 5 trading on New York and London markets, which Giovanni Staunovo of UBS Wealth Management said was “more related to profit taking after a good week.”
Staunovo said market participants likely reconsidered the US Energy Information Administration latest inventory report.
EIA reported crude supplies fell 7.4 million bbl for the week ended Dec. 29 while gasoline inventories rose by 4.8 million bbl.
US oil production for the week ended Dec. 29 was 9.782 million b/d, up 28,000 b/d from the previous week, EIA’s Weekly Petroleum Status Report said.
Jenna Delaney, S&P Global Platts senior oil analyst, said US crude oil inventories ended 2017 at 31 million bbl below the 2015 yearend level.
“Final numbers for 2017 wrap up a year of significant draws on US petroleum inventories,” she said.
Energy prices
The February light, sweet crude contract on the New York Mercantile Exchange climbed 38¢ on Jan. 4 to $62.01/bbl. The March contract increased by 35¢ to $61.90/bbl.
The NYMEX natural gas price for February fell nearly 13¢ to a rounded $2.88/MMbtu. The Henry Hub cash gas price was $4.42/MMbtu.
Ultralow-sulfur diesel for February fell 1¢ to a rounded $2.08/gal. The NYMEX reformulated gasoline blendstock for February also rose by 1¢ to a rounded $1.80/gal.
The Brent crude contract for March on London’s ICE gained 23¢ to settle at $68.07/bbl on Jan. 4. The April contract added 22¢ to $67.51/bbl.
The gas oil contract for January was $608/tonne, up $1.25. OPEC’s basket of crudes was $66.13/bbl on Jan. 4, up $1.01.
Contact Paula Dittrick at [email protected].
