Brent crude oil for March delivery traded as high as $70.05/bbl on the London market Jan. 12 before retreating to settle at about $69.90/bbl while light, sweet crude prices in New York settled just above $64/bbl.
US crude oil future prices have had the strongest first 2 weeks of a year since 2005, analysts said.
Ed Morse, Citigroup global head of commodities research, called $65/bbl a “natural ceiling” for oil prices without a significant supply disruption. He believes the factors pushing prices higher are temporary.
Goldman Sachs said an industry conference in Miami over Jan. 10-11 indicated shale executives are planning to use revenue from higher oil prices to pay down debt.
In a research note, Goldman Sachs said world oil demand is expected to rise during 2018. Oil supply could be disrupted by potential problems in Venezuela, Iraq, Iran, Libya, and Nigeria, Goldman analysts said.
On Jan. 12, US President Donald Trump said he would extend sanctions relief to Iran.
In a statement, Trump said this is the last time he will issue such waivers without addressing what he considers weaknesses of a 2015 nuclear agreement in which US officials waived sanctions against Iran.
Trump repeatedly has suggested the US will withdraw from the international agreement. The US waivers are periodically reviewed to extend sanctions relief. The next sanctions review is scheduled for May.
Energy prices
The February light, sweet crude contract on the New York Mercantile Exchange gained 50¢ on Jan. 12 to $64.30/bbl. The March contract increased 55¢ to $64.23/bbl.
The NYMEX natural gas price for February rose 11¢ to $3.02/MMbtu. The Henry Hub cash gas price was $4/MMbtu, up 76¢.
Ultralow-sulfur diesel for February gained less than a penny to remain at a rounded $2.08/gal. The NYMEX reformulated gasoline blendstock for February gained 1¢ to a rounded $1.85/gal.
The Brent crude contract for March on London’s ICE rose 61¢ to settle at $69.87/bbl on Jan. 12. The April contract was up 61¢ to $69.38/bbl. The gas oil contract for February was $612.75/tonne, down $6.25.
The Organization of Petroleum Exporting Countries’ basket of crudes was $67.17/bbl on Jan. 12, down 21¢.
Contact Paula Dittrick at [email protected].
