Oil futures prices dipped more than $2/bbl on both London and New York markets on May 25 after the energy ministers of Saudi Arabia and Russia reportedly discussed easing production-cut targets during a meeting in St. Petersburg.
Saudi Arabia Energy Minister Khalid al-Falih said May 25 that the Organization of Petroleum Exporting Countries and its allies are likely to increase production to address rising oil prices.
Production-cut targets by OPEC and other major producers since Jan. 1, 2017, have resulted in lower world oil supply in support of higher prices. OPEC is scheduled to meet in Vienna in June to discuss oil prices, which have risen in recent weeks.
Recent threats to oil production and exports from Venezuela and Iran helped push the Brent price toward $80/bbl. Brent briefly rose above $80/bbl during May 17 trading, but it dropped below that threshold by closing.
Analysts say oil prices gained after US President Donald Trump withdrew US participation from an international agreement that lifted sanctions against Iran. New US sanctions are anticipated unless Iran complies with a list of US demands.
Separately, Baker Hughes reported the weekly US drilling rig count was up 13 units to 1,059 for the week ended May 25 (OGJ Online, May 25, 2018).
Energy prices
The July light, sweet crude contract on the New York Mercantile Exchange fell $2.83 to settle at $67.88/bbl on May 25. The August price was down $2.80 to $67.78/bbl.
The NYMEX natural gas price for June edged down less than 1¢ to a rounded $2.94/MMbtu. The Henry Hub cash gas price gained 2¢ to $2.89/MMbtu on May 25.
Ultralow-sulfur diesel for June dropped 57¢ to a rounded $2.21/gal. The NYMEX reformulated gasoline blendstock for June fell 5¢ to settle at a rounded $2.18/gal.
Brent crude oil for July decreased $2.35 to settle at $76.44/bbl on London’s International Commodity Exchange. The August contract was down $2.36 to $76.47/bbl. The gas oil contract for June was $679.75/tonne, down $21.
OPEC’s basket of crudes was $74.87/bbl on May 25, down $1.75.
Contact Paula Dittrick at [email protected].
