MARKET WATCH: NYMEX oil ends week with 2017 high closing

Light, sweet crude oil prices gained more than $1 to close above $55/bbl on the New York market Nov. 3—the second consecutive day the US benchmark reached a settlement high since July 2015.

Barclays analysts credited recent oil-price support to reports of global economic growth and new supply disruptions. Overall, ample world oil supplies are falling.

“Owing to the improvement in the inventory situation, which has accelerated due to unforeseen disruptions, prices have broken above resistance levels established earlier this year,” Barclays said. “Brent appears to be consolidating around $60/bbl and could make another move higher, targeting $70/bbl.”

But Barclays analysts said $70/bbl “would be unsustainable both fundamentally and from a positioning perspective and would thus be short lived.”

Barclays raised its Brent oil price forecast, saying Brent will average $60/bbl during the fourth quarter and will average $55/bbl in 2018. The average 2018 forecast was up $3 compared with Barclays earlier forecast.

“We have long forecasted a tightening fundamental backdrop in the second half of this year,” Barclays analysts said. “We think this strength will be sustained through first quarter next year.”

They cited tightening world oil supplies stemming from a variety of reasons, including a 300,000 b/d drop in northern Iraq crude exports and production during October due to unrest and technical issues.

“Hurricane-related production shut ins in the Gulf of Mexico reduced US and Mexican supply by more than 500,000 b/d in September,” Barclays said. “Finally, a synchronized and robust global economic recovery has emerged.”

In addition, Chinese oil demand growth is expected “to remain robust in 2018,” Barclays said.

Energy prices

The December light, sweet crude contract on the New York Mercantile Exchange increased $1.10 to $55.64/bbl on Nov. 3. The January 2018 contract rose $1.09 to $55.86/bbl.

The NYMEX natural gas price for December climbed nearly 5¢ to $2.98/MMbtu. The Henry Hub cash gas price for Nov. 3 was $2.74/MMbtu, up 5¢.

Heating oil for December rose 3¢ to $1.88/gal. The NYMEX reformulated gasoline blendstock for December climbed 2¢ to a rounded $1.79/gal.

The Brent crude contract for January 2018 on London’s ICE gained $1.45 to $62.07/bbl. The February 2018 contract increased $1.43 to $61.80/bbl. The gas oil contract for November was up $5.75 to $560.25/tonne.

The Organization of Petroleum Exporting Countries’ basket of crudes price was up 66¢ Nov. 3 to $59.15/bbl.

Contact Paula Dittrick at [email protected].