Light, sweet crude oil prices fell modestly June 8 on the New York market while Brent crude oil prices dropped about 80¢/bbl on the London market pending a June 22 meeting of the Organization of Petroleum Exporting Countries in Vienna.
Both OPEC and some non-OPEC producers, including Russia, are expected to discuss production levels during June 20-21 seminars before the OPEC meeting.
Saudi Arabia oil officials said they boosted Saudi production by more than 100,000 b/d during May, hitting about 10 million b/d. They said Saudi Arabia plans to boost output by at least another 100,000 b/d in June although they did not provide details.
Increased oil production is intended to ease market concerns about anticipated reduced world oil supply stemming from pending US sanctions against Iran. Analysts also are concerned about falling oil production from Venezuela, which faces an economic crisis.
Interfax reported that Russia increased its crude production to 11.1 million b/d in June, which is above its agreed production cap of 10.85 million b/d. ING Bank analysts said, “This appears a clear sign from Russia that the time has come to ease production cuts.”
OPEC is scheduled to release its monthly oil outlook and production report June 12 while the International Energy Agency is expected to do the same on June 13.
Since Jan. 1, 2017, OPEC and some non-OPEC producers have been complying with production-cut targets of about 1.8 million b/d compared with production levels in late 2016. The supply cuts helped support crude oil prices.
But geopolitical risks to Iran and Venezuela—both OPEC members—prompted Saudi Arabia and Russia to indicate recently that they could begin increased oil production sooner than previously planned. The existing production-cut targets are scheduled to expire Dec. 31.
Energy prices
The July light, sweet crude contract on the New York Mercantile Exchange declined 21¢ to settle at $65.74/bbl on June 8. The August price was down 22¢ to $65.67/bbl.
The NYMEX natural gas price for July fell 4¢ to a rounded $2.89/MMbtu. The Henry Hub cash gas price dropped 7¢ to $2.86/MMbtu on June 8.
Ultralow-sulfur diesel for July decreased 1.6¢ to a rounded $2.16/gal. The NYMEX reformulated gasoline blendstock for July edged up less than a penny to remain at a rounded $2.11/gal.
Brent crude oil for August dropped by 86¢ to settle at $76.46/bbl on London’s International Commodity Exchange. The September contract was down 79¢ to $76.19/bbl. The gas oil contract for June was $671.50/tonne, up $3.25.
OPEC’s basket of crudes was $74.22/bbl on June 8, up 60¢.
Contact Paula Dittrick at [email protected].
