Crude oil prices on the New York and London markets ended last week with light movement, and prices remained mixed in early trading on May 18 on reports of more unrest in Iraq and Yemen.
Islamic State has taken control of the Iraqi city of Ramadi, a major military setback for US-backed forces, while a Saudi Arabian-led coalition launched airstrikes on Shiite Huthi rebels in Yemen following the expiration of a 5-day ceasefire.
Resulting concerns about supply disruptions in the Middle East were offset, however, by reports that US production could make a quick recovery if prices continue to creep up. In Baker Hughes Inc.’s US rig count for the week ended May 15, declines were the smallest of the 23-week slide, headlined by a 3-unit rise in the Eagle Ford—the shale play’s first gain of the year (OGJ Online, May 15, 2015).
Iran’s Deputy Oil Minister Rokneddin Javadi, meanwhile, reaffirmed to Reuters during the Asia Oil & Gas Conference in Kuala Lumpur that the Organization of the Petroleum Exporting Countries, set to meet June 5, is unlikely to cut production despite requests to do so by Iran and Venezuela.
“From a commercial point of view, today’s prices should be sustained and increase gradually,” Javadi said, adding that he expects to see $80/bbl oil by yearend 2016.
The June crude oil contract on the New York Mercantile Exchange dropped 19¢ on May 15 to settle at $59.69/bbl. The July contract dropped 30¢ to settle at $60.54/bbl.
The July ICE contract for Brent crude gained 11¢ to $66.81/bbl, while the August contract gained 4¢ to $67.29/bbl. The ICE gas oil contract for June lost $3.25 to $611/tonne.
The average price for OPEC’s basket of 12 benchmark crudes for May 15 was $62.74/bbl, down 39¢.
The natural gas contract for June edged up by about a penny to a rounded $3.02/MMbtu. The Henry Hub, La., gas price gained 9¢ to $2.96/MMbtu.
Heating oil for June was virtually unchanged at a rounded $2.01/gal. The price of reformulated gasoline stock for oxygenates blending for June was virtually unchanged at a rounded $2.06/gal.
