Brent crude oil prices gained more than $2/bbl on the London market May 30 while light, sweet crude oil prices gained more than $1/bbl in New York. Analysts attributed price volatility to uncertainty about future actions by the Organization of Petroleum Exporting Countries.
“The expectation that OPEC could increase production in June sent prices lower, but now this expectation has moderated a little bit,” Giovanni Staunovo, a UBS wealth management analyst, told the Wall Street Journal.
Iran, OPEC’s third-largest producer, wrote a letter to OPEC. It sought the cartel’s support regarding US President Donald Trump’s decision to withdraw US participation from an international agreement that eased sanctions on Iran in exchange for curbs on Iran’s nuclear program. Previous sanctions have caused Iran’s exports to fall by about 1 million b/d.
Iran’s Oil Minister Bijan Zanganeh also criticized other ministers who have “implicitly or unwittingly” spoken for the cartel.
Staunovo said Iran is upset because that other OPEC members, especially Saudi Arabia, might fill the world oil supply gap and take Iran’s market share if Iran’s export and production volumes are disrupted.
Separately, the US Energy Information Administration was scheduled to release its weekly update on oil and productions May 31, a day later than normal because of the Memorial Day holiday.
The American Petroleum Institute said its own estimate showed a US crude inventory build of 1 million bbl for the week ended May 25.
Traders and analysts surveyed by WSJ said they expect the EIA’s report will show US crude stocks decrease by 300,000 bbl for the week ended May 25.
Energy prices
The July light, sweet crude contract on the New York Mercantile Exchange gained $1.48 to settle at $68.21/bbl on May 30. The August price was up $1.46 to $68.08/bbl.
The NYMEX natural gas price for July fell nearly 1¢ to a rounded $2.88/MMbtu. The Henry Hub cash gas price gained 1¢ to $2.83/MMbtu on May 30.
Ultralow-sulfur diesel for June gained 4.6¢ to a rounded $2.23/gal. The NYMEX reformulated gasoline blendstock for June rose 4¢ to settle at $2.18/gal.
Brent crude oil for July soared $2.11 to settle at $77.50/bbl on London’s International Commodity Exchange. The August contract was up $2.23 to $77.72/bbl. The gas oil contract for June was $684.75/tonne, up $13.
The price for OPEC’s basket of crudes was unavailable because the OPEC Secretariat was closed May 31.
Contact Paula Dittrick at [email protected].
