Oil prices gained by more than $1.80 on both the New York and London markets Mar. 9, which analysts attributed to positive US economic indicators and a declining rig count. Light, sweet crude for April delivery settled above $62/bbl while Brent for May delivery settled above $65/bbl.
The US Department of Labor said the US economy added 313,000 jobs in February—its biggest monthly gain in more than a year. The oil market has moved with shifts in stocks and currencies in recent weeks. The Dow Jones Industrial Average and the S&P 500 both rose on Mar. 9.
“Financial influences from equity and currency markets seem to have kept their hold on energy trading,” analysts at TAC Energy told the Wall Street Journal on Mar. 9.
The WSJ Dollar Index recently dropped slightly. It measures the dollar’s value against a basket of other currencies. Oil is traded in US dollars, and a declining dollar makes oil less expensive for buyers starting with other currencies.
Baker Hughes said the US drilling rig count was up 3 units for the second week, reaching 984 rigs working during the week ended Mar. 9 (OGJ Online, Mar. 9, 2017).
The number of rigs drilling for oil fell 4 units from the previous week to 796 but was up from the 619 rigs drilling for oil the same week a year ago. Total rigs drilling for natural gas added 7 units to reach 188 units for the week ended Mar. 9.
Meanwhile on world oil markets, analysts suggest a proposed meeting between the leaders of US and North Korea could ease some uncertainty and geopolitical risk.
Olivier Jakob, Petromatrix managing director, said such a meeting “would be slightly supportive” for oil prices.
Iran wants the Organization of Petroleum Exporting Countries to work to keep oil prices around $60/bbl to contain US shale producers, Iran Oil Minister Bijan Zanganeh told WSJ.
“If the price jumps [to] around $70…it will motivate more production in shale oil,” Zanganeh said.
Zanganeh told WSJ that OPEC could agree in June to begin easing current production limits in 2019.
Energy prices
The April light, sweet crude contract on the NYMEX gained $1.92 on Mar. 9 to settle at $62.04/bbl. The May contract rose $1.86 to $61.92/bbl.
The NYMEX natural gas price for April fell more than 2¢ to a rounded $2.73/MMbtu. The Henry Hub cash gas price was down 3¢ to $2.68/MMbtu on Mar. 9.
Ultralow-sulfur diesel for April increased by a rounded 3¢ to a rounded $1.89/gal. The NYMEX reformulated gasoline blendstock for April gained nearly 4¢ to $1.90/gal.
Brent crude oil for May settled up $1.88 to $65.49/bbl on London’s International Commodity Exchange. The June contract was up $1.83 to $65.27/bbl. The gas oil contract for April was $575.75/tonne.
OPEC’s basket of crudes was $61.95/bbl on Mar. 9, up 10¢.
Contact Paula Dittrick at [email protected].
