Light, sweet crude oil prices fell June 6 on the New York market after a weekly government report showed higher US oil inventories and rising US oil production. Analysts also remain closely focused on risks to world oil supplies pending US sanctions against Iran.
The US Energy Information Administration reported a 2.1 million-bbl build in crude supplies to 436.6 million bbl, excluding the Strategic Petroleum Reserve, for the week ended June 1.
Crude prices fell following release of the US inventory report, but Commerzbank analysts noted that “looming supply outages in Iran and the increasing outages in Venezuela,” explain why oil prices will recover quickly.
US President Donald Trump in May withdrew US participation in a 2015 international agreement to curb Iran’s nuclear program in exchange for the lifting of sanctions by a group of countries. New US sanctions are expected to threaten Iran’s oil export levels and oil production.
Some European oil companies say they will stop doing business with Iran as result of impending US sanctions.
Meanwhile, oil supply disruptions continue in Venezuela, which is behind on oil shipments to customers by almost a month, Reuters reported.
The EIA’s Weekly Petroleum Status Report showed US oil production reached 10.8 million b/d for the week ended June 1, up 31,000 b/d from the previous week. Alaska’s production fell 2,000 b/d to 502,000 b/d while oil production across the Lower 48 rose 35,000 b/d to 10.3 million b/d for the week ended June 1.
Energy prices
The July light, sweet crude contract on the New York Mercantile Exchange fell 79¢ to settle at $64.73/bbl on June 6. The August price was down 76¢ to $64.70/bbl.
The NYMEX natural gas price for July edged up less than 1¢ to a rounded $2.90/MMbtu. The Henry Hub cash gas price fell 2¢ to $2.85/MMbtu on June 6.
Ultralow-sulfur diesel for July declined 1.5¢ to a rounded $2.13/gal. The NYMEX reformulated gasoline blendstock for July fell a rounded 4¢ to settle at a rounded $2.07/gal.
Brent crude oil for August dropped 2¢ to settle at $75.36/bbl on London’s International Commodity Exchange. The September contract was down 17¢ to $74.96/bbl. The gas oil contract for June was $654.75/tonne, down $2.75.
The Organization of Petroleum Exporting Countries’ basket of crudes was $73.05/bbl on June 6, up 26¢.
Contact Paula Dittrick at [email protected].
