Brent crude oil prices gained modestly during the May 22 trading session in London to remain above $79/bbl for a second consecutive day while light, sweet crude oil prices dropped slightly May 22 on the New York market to settle above $72/bbl.
“The existing supply outages in Venezuela and the risk of such outages in Iran…have already resulted in a noticeable tightening of oil supply,” Commerzbank analysts said.
Earlier this month, Brent crude for July briefly broke above $80/bbl but settled lower. Gary Ross, S&P Global Platts head of global oil analytics, told CNBC in a recent interview that, “I think $80[/bbl] West Texas Intermediate is not out of the question.”
US President Donald Trump earlier this month withdrew the US from an international alliance that lifted sanctions against Iran in a 2015 agreement about Iran’s nuclear program.
Meanwhile, the Organization of Petroleum Exporting Countries and 10 producers outside the cartel, including Russia, continue following production-cut targets of 1.8 million b/d since Jan. 1, 2017, in efforts to reduce world oil supplies.
Crude prices have risen, and crude oil supplies worldwide have started to tighten. OPEC and other major producers are scheduled to meeting June 22 in Vienna.
OPEC is expected to discuss production levels amid supply risks from Iran and Venezuela, both OPEC members.
US retail gasoline prices have risen along with crude oil prices. Ross said he believes Trump could become unhappy with higher gasoline prices. One possible response might be that the president authorizes a release from the US Strategic Petroleum Reserve, Ross told CNBC.
Energy prices
The June light, sweet crude contract on the New York Mercantile Exchange fell 11¢ to settle at $72.13/bbl on May 22. The July price was down 15¢ to $72.20/bbl.
The NYMEX natural gas price for June increased nearly 10¢ to a rounded $2.90/MMbtu. The Henry Hub cash gas price edged up 1¢ to $2.78/MMbtu on May 22.
Ultralow-sulfur diesel for June nudged up less than a penny to $2.28/gal. The NYMEX reformulated gasoline blendstock for June gained 1¢ to settle at a rounded $2.27/gal.
Brent crude oil for July increased 35¢ to settle at $79.57/bbl on London’s International Commodity Exchange. The August contract was up 33¢ to $79.59/bbl. The gas oil contract for June was $702.50/tonne, down $9.75.
OPEC’s basket of crudes was $77.19/bbl on May 22, up 98¢.
Contact Paula Dittrick at [email protected].
