Light, sweet crude prices rose to settle June 14 in the $66-67/bbl range on the New York futures market while Brent crude oil prices fell to settle in the $75-76/bbl range in London pending a June 22 meeting of the Organization of Petroleum Exporting Countries.
Barclays expects OPEC and some other major producers, including Russia, will agree to raise production, which means they will amend the Declaration of Cooperation, an agreement reached in 2016 to set production-cut targets.
As of Jan. 1, 2017, participating major producers have held back 1.8 million b/d compared with 2016 levels.
“Our base case is that OPEC crude supplies (excluding Venezuela and Iran) increase by 700,000-800,000 b/d,” by the fourth quarter compared with the second quarter, Barclays analysts said in an oil special report on June 14.
Separately, Commerzbank analyst Carsten Fritsch said Saudi Arabia is considering an increase of 500,000 to 1 million b/d while Russia would like to raise output as much as 1.5 million b/d. Meanwhile, Iran and Venezuela oppose any increase in the production-cut targets, he said.
In the latest OPEC Monthly Oil Market Report, secondary sources estimated total OPEC oil production averaged 31.87 million b/d in May, up 35,000 b/d from April. Higher production in Saudi Arabia, Algeria, and Iraq partially offset decreases from Nigeria, Venezuela, and Libya.
Iran’s future production and exports are expected to fall given that US President Donald Trump plans to impose unilateral US sanctions against Iran.
Energy prices
The July light, sweet crude contract on the New York Mercantile Exchange gained 25¢ to settle at $66.89/bbl on June 14. The August price was up 17¢ to $66.69/bbl.
The NYMEX natural gas price for July edged up a fraction of a penny to remain at a rounded $2.96/MMbtu. The Henry Hub cash gas price increased 2¢ to $2.96/MMbtu on June 14.
Ultralow-sulfur diesel for July fell 2.6¢ to $2.16/gal. The NYMEX reformulated gasoline blendstock for July fell 3¢ to a rounded $2.09/gal.
Brent crude oil for August fell 80¢ to $75.44/bbl on London’s International Commodity Exchange. The September contract dropped 86¢ to $75.62/bbl. The gas oil contract for July was $660.75/tonne, down $5.25.
An average price for OPEC’s basket of crudes was unavailable because OPEC’s Secretariat office was closed June 15.
Contact Paula Dittrick at [email protected].
