Crude oil for June delivery on the New York Mercantile Exchange settled at $68.40/bbl on Apr. 20 while Brent crude oil for June settled slightly above $74/bbl. But oil prices retreated during Apr. 23 trading on a strengthening US dollar.
“We are seeing some renewed dollar strength…, which is really the main driver,” said Ole Hansen, Saxo Bank head of commodity strategy.
Oil is traded in US dollars, so a stronger dollar makes oil more expensive for buyers starting out with other currencies. The Wall Street Journal Dollar Index, which measures the dollar against a basket of 16 other currencies, was up 0.41% early Apr. 23.
On Apr. 20, major producers met in Jeddah, Saudi Arabia, saying they were content with production-cut targets agreed upon in 2016 to reduce world oil supplies and to support crude oil prices. In November 2017, the existing production-cut targets were extended through 2018.
Those targets, which initially took effect Jan. 1, 2017, call for participating nations to lower production by nearly 1.8 million b/d from 2016 production levels. OPEC production accounts for 1.2 million b/d of the total.
The Apr. 20 meeting included representatives from the Organization of Petroleum Exporting Countries and Russia.
Energy prices
The May light, sweet crude contract on the NYMEX gained 9¢ on Apr. 20 to settle at $68.38/bbl. The June contract rose 7¢ to $68.40/bbl.
The NYMEX natural gas price for May gained nearly 8¢ to $2.74/MMbtu. The Henry Hub cash gas price was $2.77/MMbtu on Apr. 19. The Apr. 20 price was unavailable.
Ultralow-sulfur diesel for May edged up 1¢ to a rounded $2.12/gal. The NYMEX reformulated gasoline blendstock for May rose 2¢ to a rounded $2.09/gal.
Brent crude oil for June climbed 28¢ to settle at $74.06/bbl on London’s International Commodity Exchange. The July contract was up 24¢ to $73.35/bbl. The gas oil contract for May was $641.25/tonne.
OPEC’s basket of crudes averaged $70.36/bbl on Apr. 20, down 60¢.
Contact Paula Dittrick at [email protected].
