Light, sweet crude futures for both March and April fell $1.95 on the New York Mercantile Exchange Feb. 9 to settle under $60/bbl while Brent crude oil for April delivery fell slightly more than $2—its biggest single-day drop since July—to settle under $63/bbl.
The crude benchmarks have settled lower for six consecutive days, which analysts largely blame on rising US oil production. US oil prices had stayed above $60/bbl for much of 2018 so far with Brent hovering around $70/bbl.
Olivier Jakob, Petromatrix managing director, said, “US producers have reacted in style to the rising oil prices and have accelerated the pace of growth of US crude oil production.”
Meanwhile, the US rig count rose. Oil investors and traders watch the rig count as an indicator of future production.
Baker Hughes reported the US drilling rig count jumped 29 units to 975 rigs working during the week ended Feb. 9 (OGJ Online, Feb. 9, 2017). The latest total was up 234 units from a year ago.
Rigs targeting oil were up 26 units to 791 compared with 591 rigs drilling for oil for the same week a year ago.
Earlier in the week, oil prices fell while stock markets worldwide slumped. The US equity market staged a late-afternoon Feb. 9 rebound, ending a volatile week. On Feb. 12, crude prices rose in early trading with global stock markets gaining upward momentum.
The Organization of Petroleum Exporting Countries on Feb. 12 issued its Monthly Oil Market Report saying supply growth from non-OPEC producers likely will increase by 1.4 million b/d this year with US oil accounting for 1.3 million b/d.
OPEC said it expects world oil demand will reach 98.6 million b/d this year, 60,000 b/d higher than last month’s forecast.
Energy prices
The March light, sweet crude contract on the New York Mercantile Exchange fell $1.95 on Feb. 9 to settle at $59.20/bbl. The April contract was down $1.95 to $58.99/bbl.
The NYMEX natural gas price for March settled at a rounded $2.58/MMbtu, down 11¢. The Henry Hub cash gas price fell 10¢ to $2.61/MMbtu.
Ultralow-sulfur diesel for March declined by a rounded 7¢ to a rounded $1.85/gal. The NYMEX reformulated gasoline blendstock for March fell 6¢ to a rounded $1.70/gal.
Brent on London’s ICE for April fell $2.02 to $62.79/bbl. The May contract was down $2.01 to $62.48/bbl. The gas oil contract for March was $568/tonne.
OPEC’s basket of crudes was $61.52/bbl on Feb. 9, down $1.17.
Contact Paula Dittrick at [email protected].
