MARKET WATCH: Brent, NYMEX crude oil futures drop more than $1/bbl

Nov. 11, 2014
Crude oil prices fell more than $1/bbl on the New York and London markets during Nov. 10 trading as traders and analysts remain focused on whether the Organization of Petroleum Exporting Countries will cut production quota levels at its Nov. 27 meeting in Vienna.

Crude oil prices fell more than $1/bbl on the New York and London markets during Nov. 10 trading as traders and analysts remain focused on whether the Organization of Petroleum Exporting Countries will cut production quota levels at its Nov. 27 meeting in Vienna.

Oil futures prices were volatile on uncertainty, traders said. In overnight electronic trading, the Brent crude oil contract for December touched a 4-year low of less than $82/bbl but later recovered slightly in Nov. 12 trading on the ICE.

Meanwhile, US natural gas prices have rebounded upon forecasts for colder weather, Barclays Research Inc. said in a research note.

“Recent colder-than-normal weather helped gas prices exceed our otherwise range-bound expectations for the remainder of the quarter,” Barclays analysts said.

“Looking over the longer term, with storage ending October at 3.571 tcf and production growth set to continue, supply should be ample over the course of the winter and we expect to end the withdrawal season in March 2015 marginally above the average since 2007–helping the market forget that March 2014’s low storage level ever happened,” Barclays added.

Commodity Weather Group said an “impressive” cold pattern is expected to bring freezing or near-freezing temperatures from Texas to the US east coast this week. The US National Weather Service’s has said below-normal temperatures are likely for 6-10 days.

Energy prices

The New York Mercantile Exchange December crude oil contract dropped $1.25 on Nov. 10, closing at $77.40/bbl. The January 2015 contract fell $1.22 to $77.38/bbl.

The natural gas contract for December dipped 15.7¢ to a rounded $4.26/MMbtu. The cash gas price at Henry Hub, La., was $4.16/MMbtu, up 15¢.

Heating oil for December delivery was down 3¢ to a rounded $2.47/gal. Reformulated gasoline stock for oxygenate blending for December delivery also fell 3.4¢ to a rounded $2.10/gal.

The December ICE contract for Brent crude oil was down $1.05 to $82.34/bbl. The January 2015 contract dropped $1.02 to $82.95/bbl. The ICE gas oil contract for November rose $1.75, settling at $742.50/tonne.

The average price for OPEC’s basket of 12 benchmark crudes was $78.98/bbl on Nov. 10, up 31¢ from the previous trading session.

Contact Paula Dittrick at [email protected].

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.