The light, sweet crude oil contract for August delivery fell modestly to settle just under $74/bbl on July 2 while Brent crude oil for September delivery fell by nearly $2 in London to settle above $77/bbl.
US crude prices have gained support from supply disruptions in Canada. Syncrude Canada Ltd. stopped production at its Mildred Lake oil sands complex near Fort McMurray, Alta., because of a June 20 power outage that shut down all processing units. It’s expected to be weeks before it returns to service (OGJ Online, June 26, 2018).
Brent prices did not move as much as anticipated after armed militia attacks shut Libya’s main oil exporting terminals. The Wall Street Journal reported an estimated 850,000 b/d had been temporarily removed from world oil supplies.
“Brent is not really flying despite the outages in Libya,” said Olivier Jakob, a Petromatrix oil analyst. “It’s difficult to know how long that will last because it’s more due to political issues, [while] West Texas Intermediate is pretty much pricing in the very low stocks in Cushing,” he added.
Abu Dhabi National Oil Co. (ADNOC) confirmed it currently has an oil production capacity of about 3.3 million b/d and plans to increase its production capacity to 3.5 million b/d by yearend.
Separately, the International Energy Agency’s June Oil Market Report listed May UAE production at 2.87 million b/d. The Organization of Petroleum Exporting Countries has established production-cut targets based on 2016 levels.
IEA put UAE capacity at 3.2 million b/d. ADNOC said it has capacity to increase oil production to help alleviate world oil supply shortages. ADNOC emphasized it is cooperating with UAE Ministry of Energy and Industry and coordinating with OPEC on crude production levels for the overall cartel.
Energy prices
The August light, sweet crude contract fell 21¢ to settle at $73.94/bbl on July 2. The September price was down 84¢ to $71.62/bbl.
The NYMEX natural gas price for August decreased 6¢ to a rounded $2.86/MMbtu. The Henry Hub cash gas price dropped 3¢ to $2.87/MMbtu on July 2.
Ultralow-sulfur diesel for August decreased 5¢ to a rounded $2.15/gal. The NYMEX reformulated gasoline blendstock for August dropped 4.6¢ to $2.10/gal.
Brent crude oil for September decreased $1.93 to $77.30/bbl on London’s International Commodity Exchange. The October contract increased $1.88 to $76.98/bbl. The gas oil contract for July was $663.50/tonne, down $12.25.
The OPEC basket of crudes average price for July 2 was $75.28/bbl, down 41¢.
Contact Paula Dittrick at [email protected].
