Crude oil prices continued dropping on the New York market Oct. 8 after the US Federal Reserve indicated some concern that a strengthening dollar could weigh on the economy.
On Oct. 8, the Federal Open Market Committee released a transcript from its Sept. 16-17 meeting. The minutes prompted a rise in US stock markets but failed to support oil prices.
On Oct. 9, Barclays issued a research note saying analysts have lowered their oil price forecasts. Analysts with Barclays Research now expect light, sweet US benchmark oil will average $85/bbl in the fourth quarter and $89/bbl in 2015. Previously, they had forecast $98/bbl for the fourth quarter and $100/bbl for 2015.
In addition, Barclays analysts lowered their forecast for Brent. Analysts expect Brent will average $93/bbl in the fourth quarter, down from an earlier estimate of $106/bbl. For 2015, Barclays analysts expect Brent will average $96/bbl compared with its earlier forecast of $107/bbl.
“The rapid demand contraction, dollar strengthening, and unexpected Libyan output return has lowered prices,” Barclays said. For the short term, the market appears shielded from a disruption in oil supplies from Libya, Iraq, or other members of the Organization of Petroleum Exporting Countries.
OPEC’s next regular meeting is scheduled for late November, and analysts say they await any signs the cartel might cut production to support oil prices.
Separately, the US Energy Information Administration noted inventories increased last week for natural gas in underground storage across the Lower 48.
Working gas in storage was estimated at 3.2 tcf as of Oct. 3, which was a net increase of 105 bcf from the previous week. Stocks were 359 bcf less than last year at this time and 378 bcf below the 5-year average of 3.58 tcf, EIA said in its weekly report.
Energy prices
The New York Mercantile Exchange November crude oil contract dropped $1.54 on Oct. 8, closing at $87.31/bbl, while the December contract dropped $1.39 to $86.59/bbl.
The natural gas contract for November declined 10¢ to a rounded $3.86/MMbtu. The cash gas price at Henry Hub, La., gained 1¢, closing at $3.88/MMbtu.
Heating oil for November delivery declined 3.1¢ to a rounded $2.58/gal. Reformulated gasoline stock for oxygenate blending for November delivery gave up a rounded 5¢ to $2.32/gal.
The November ICE contract for Brent crude oil was down 73¢ to close at $91.38/bbl. The December contract was down 78¢ to $91.79/bbl. The ICE gas oil contract for October gave up $7.75¢, settling at $769.25/tonne.
The average price for OPEC’s basket of 12 benchmark crudes was $88.32/bbl on Oct. 8, down $1.05.
Contact Paula Dittrick at [email protected].
