MARKET WATCH: NYMEX oil prices rise on revised OPEC forecast

Feb. 10, 2015
Crude oil prices climbed more than $1/bbl on Feb. 9 to settle above $52/bbl, marking a third consecutive trading session that ended with higher prices. The latest gain came after the Organization of Petroleum Exporting Countries increased its forecast for demand for OPEC crude oil during 2015.

Crude oil prices climbed more than $1/bbl on Feb. 9 to settle above $52/bbl, marking a third consecutive trading session that ended with higher prices. The latest gain came after the Organization of Petroleum Exporting Countries increased its forecast for demand for OPEC crude oil during 2015.

OPEC forecast demand for OPEC oil will average 29.21 million b/d in 2015, up 430,000 b/d from its previous forecast. The group also slashed its outlook for crude supply growth in non-OPEC countries (OGJ Online, Feb. 9, 2015).

Separately on Feb. 10, the International Energy Agency issued two oil market reports, saying spending cuts by oil producers and a sharp decline in the number of rigs drilling for crude oil likely will slow US oil production growth, spurring a rebound in prices.

World oil supplies fell by 235,000 b/d during January to 94.1 million b/d on lower OPEC and non-OPEC production, the IEA Oil Market Report (OMR) for February told subscribers in an abbreviated issue that was released on the same day as the launch of the Medium-Term Oil Market Report 2015.

Reductions in capital expenditures prompted IEA to cut its projected 2015 supply growth from non-OPEC producers to 800,000 b/d. US 2015 production is seen 200,000 b/d lower than in the January OMR, at an average 12.4 million b/d, with most of the cuts anticipated during the second half.

IEA’s Medium-Term report gave a 5-year outlook on world oil markets, saying a “price rebound…seems inevitable.”

In its analysis, IEA expects US shale oil output will surge again from 2017, stimulated by an oil-price recovery. IEA forecasts supply will rise to about 5.2 million b/d in 2020, compared with 3.6 million b/d in 2014.

“The price correction will cause the North American supply party to mark a pause; it will not bring it to an end,” IEA said.

IEA’s forecast demand for OPEC oil will start rising in 2016 and reach 32.1 million b/d by 2020, which would be 2.7 million b/d above 2014 demand for OPEC oil.

Energy prices

The New York Mercantile Exchange crude oil contract for March delivery gained $1.17 on Feb. 9, closing at $52.86/bbl. The April contract increased $1.17 to $53.67/bbl.

The natural gas contract for March was up 1.8¢ to a rounded $2.60/MMbtu on NYMEX. The Henry Hub, La., gas price was up 5¢ to $2.60/MMbtu on Feb. 9.

Heating oil for March climbed 3.4¢ to a rounded $1.87/gal. Reformulated gasoline stock for oxygenate blending for March was up 1.9¢ to a rounded $1.58/gal.

The March ICE contract for Brent crude oil climbed 54¢ to settle at $58.34/bbl. Meanwhile, the April Brent contract was up 65¢ to $59.33/bbl. The ICE gas oil contract for March gained $15 to $565.50/tonne.

The average price for OPEC’s basket of 12 benchmark crudes on Feb. 9 was $53.58/bbl, up 22¢ from the previous trading session.

Contact Paula Dittrick at [email protected].

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