MARKET WATCH: Crude benchmark prices drop pending likely OPEC production increase

June 20, 2018
Light, sweet crude oil prices fell on the New York market June 19 as did Brent crude prices in London while oil ministers gather in Vienna for a June 22 meeting of the Organization of Petroleum Exporting Countries.  

Light, sweet crude oil prices fell on the New York market June 19 as did Brent crude prices in London while oil ministers gather in Vienna for a June 22 meeting of the Organization of Petroleum Exporting Countries.

OPEC and other major producers, including Russia, are expected to ease production-cut targets that have helped raise prices to 3-year highs earlier this year. Some OPEC members, including Iran, oppose a cartel production increase. Iran faces reinstatement of US sanctions.

Regarding US inventories, the American Petroleum Institute said its primarily estimates showed US crude supplies fell by 3 million bbl for the week ended June 15. The US Energy Information Administration was scheduled to release its weekly inventory report on June 20.

Meanwhile, the spread between the US oil futures benchmark and the Brent price for August delivery widened to nearly $11 with June 19 settlements. The gap increased after China announced retaliatory tariffs on US products as trade tensions escalate between the two nations.

Energy prices

The July light, sweet crude contract on the New York Mercantile Exchange fell 78¢ to settle at $65.07/bbl on June 19. The August price dropped 79¢ to $64.90/bbl.

The NYMEX natural gas price for July declined 5¢ to a rounded $2.90/MMbtu. The Henry Hub cash gas price decreased 7¢ to $2.90/MMbtu on June 19.

Ultralow-sulfur diesel for July dropped nearly 1¢ to a rounded $2.12/gal. The NYMEX reformulated gasoline blendstock for July decreased more than 1¢ to a rounded $2.04/gal.

Brent crude oil for August dropped 25¢ to $75.08/bbl on London’s International Commodity Exchange. The September contract decreased 30¢ to $74.64/bbl. The gas oil contract for July was $647.75/tonne, down 25¢.

OPEC’s basket of crudes averaged $71.87/bbl on June 19, up 78¢.

Contact Paula Dittrick at [email protected].