Light, sweet crude oil prices rose slightly on the New York market June 12 to remain above $66/bbl while Brent crude oil prices fell in London but held above $75/bbl. The International Energy Agency said June 13 that it expects world oil demand to remain brisk.
The Organization of Petroleum Exporting Countries is due to meet June 22 in Vienna at which time OPEC and other producers, including Russia, are likely to discuss existing production-cut targets.
Saudi Arabia and Russia recently had said they are willing to increase production given overall rising oil prices and geopolitical risks to supply in Venezuela and Iran.
Ole Hansen, head of Saxo Bank commodity strategy, said traders and analysts primarily appear to be focused on the OPEC meeting and the possibility of ramped-up production.
The existing production-cut targets have OPEC and others holding back production by 1.8 million b/d since Jan. 1, 2017. The agreement currently is scheduled to expire at the end of this year.
Separately, the International Energy Agency said it expects world oil demand will stay robust throughout 2019. In its monthly report, IEA forecast global oil demand will rise by 1.4 million b/d during 2019.
Regarding oil production, IEA expects non-OPEC oil production will continue increasing, with much of the upsurge coming from US unconventional plays. Non-OPEC supply growth could slow slightly in 2019 to 1.7 million b/d compared with 2 million b/d expected in 2018, the agency said.
But risks to its forecast are rising. “These include the possibility of higher prices, a weakening of economic confidence, trade protectionism and a potential further strengthening of the US dollar,” EIA said.
Energy prices
The July light, sweet crude contract on the New York Mercantile Exchange gained 26¢ to settle at $66.36/bbl on June 12. The August price was up 25¢ to $66.28/bbl.
The NYMEX natural gas price for July dropped 1¢ to a rounded $2.94/MMbtu. The Henry Hub cash gas price declined 3¢ to $2.92/MMbtu on June 13.
Ultralow-sulfur diesel for July edged up but remained at a rounded $2.16/gal. The NYMEX reformulated gasoline blendstock for July dropped 1.5¢ to a rounded $2.09/gal.
Brent crude oil for August fell 58¢ to $75.88/bbl on London’s International Commodity Exchange. The September contract also fell 54¢ to $75.65/bbl. The gas oil contract for July was $667.25/tonne, up $1.75.
OPEC’s basket of crudes was $74.11/bbl on June 12, up 15¢.
Contact Paula Dittrick at [email protected].
