Light, sweet crude oil prices for July and August dropped more than $1/bbl on the New York market May 29. The decline marked a fifth straight session of losses—the longest streak since February—as markets reopened after being closed May 28 for the Memorial Day holiday in the US.
Prices had dropped by more than $2/bbl on New York and London markets on May 25 on reports that Saudi Arabia and Russia officials discussed the possibility of increasing oil production.
The Organization of Petroleum Exporting Countries and some other major producers, including Russia, have abided by production-cut targets since Jan. 1, 2017. The targets are 1.8 million b/d less than the output by these producers in late 2016.
The production-cut targets, scheduled to expire Dec. 31, helped reduce world oil supplies and supported oil prices, helping reverse an oil-price slump that started in late 2014.
Before recent declines, oil prices in May posted their highest levels since November 2014.
Analysts partially attribute recent price volatility to an upcoming OPEC meeting. OPEC and its allies are set to meet in Vienna on June 22.
Meanwhile, investors are expressing concerns about oil production and exports from Iran and Venezuela. US economic sanctions on both of those OPEC members could reduce world oil supplies, some analysts say.
The Trump administration said May 29 that it plans to proceed with applied tariffs on Chinese imports—a move that could complicate trade relations and affect the oil market.
The White House plans to announce by June 15 a list of $50 billion in imports from China that would be subject to tariffs of 25%. In addition, the White House by June 30 will release planned investment restrictions aimed at preventing Chinese acquisition of US technology.
Energy prices
The July light, sweet crude contract on the New York Mercantile Exchange fell $1.15 to settle at $66.73/bbl on May 29. The August price was down $1.16 to $66.62/bbl.
The NYMEX natural gas price for June fell 6¢ to a rounded $2.88/MMbtu. The Henry Hub cash gas price dropped 7¢ to $2.82/MMbtu on May 29.
Ultralow-sulfur diesel for June dropped 2.4¢ to a rounded $2.18/gal. The NYMEX reformulated gasoline blendstock for June fell nearly 4¢ to settle at a rounded $2.14/gal.
Brent crude oil for July gained 9¢ to settle at $76.39/bbl on London’s International Commodity Exchange. The August contract was up 17¢ to $75.49/bbl. The gas oil contract for June was $671.75/tonne, down $8.
OPEC’s basket of crudes was $72.91/bbl on May 29, down 46¢.
Contact Paula Dittrick at [email protected].
