US light, sweet crude prices rose by more than $1/bbl on Mar. 20 on the New York market on release of the Baker Hughes Inc. weekly rig count, which showed the number of rigs drilling in the US has fallen for 15 consecutive weeks.
For the week, oil future prices gained 2% to end a 4-week losing trend. The April contract expired with the Mar. 20 settlement.
Analysts also noted the dollar weakened on Mar. 20, making oil less expensive for buyers using other currencies.
Despite the falling rig count, oil production is estimated at 9.4 million b/d. Baker Hughes said the US drilling rig count fell 56 units—41 of which targeted oil—to settle at 1,069 rigs working during the week ended Mar. 20 (OGJ Online, Mar. 20, 2015).
Goldman Sachs issued a Mar. 20 research note saying it expects production growth will slow to 230,000 b/d by the fourth quarter.
“The entire industry is repricing as costs decline and further efficiency gains are made,” Goldman Sachs analysts said.
Energy prices
The New York Mercantile Exchange April crude oil contract rose $1.76 on Mar. 20 to $45.72/bbl, marking the front-month’s biggest one-day move since Feb. 12. The May contract increased $1.04 to settle at $46.57/bbl.
The natural gas contract for April declined 2.7¢ to a rounded $2.79/MMbtu. The Henry Hub, La., gas price was $2.82/MMbtu, down 3¢.
Heating oil for April delivery rose 1¢ to a rounded $1.73/gal. Reformulated gasoline stock for oxygenate blending for April was up 2¢ to a rounded $1.80/gal.
The May ICE contract for Brent crude oil was up 89¢, settling at $55.32/bbl. The June contract rose 92¢ to $56.43/bbl. The ICE gas oil contract for April climbed $5 to $525.75/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Mar. 20 was $49.93/bbl, down 24¢.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.
