The light, sweet crude oil contract for August delivery fell $1.20 on the New York market July 5 to settle just under $73/bbl while Brent crude oil for September delivery fell 85¢ on the London market to hold above $77/bbl.
Oil price benchmarks also fell in early July 6 trading, ending a week in which prices wavered on uncertainty about world oil supply and also the availability of spare capacity from some major producers.
Olivier Jakob, head of Petromatrix, said, “The bears are looking at the additional prompt supply, which is coming out of Saudi Arabia and you will have the bulls talking about the fact that the spare capacity is disappearing, so there are two ways to look at it.”
US President Donald Trump has been pushing for the Organization of Petroleum Exporting Countries, particularly Saudi Arabia, to raise production. Trump has advocated for higher Saudi Arabia production in a move intended to lower oil prices.
“The insistence of the US president for lower oil prices is something that cannot be ignored,” Jakob said.
The highly anticipated US-China trade war materialized on July 6 when both countries introduced tariffs on each other’s exports. China also is expected to introduce tariffs on US although the timing of that remains unclear.
Commerzbank analysts issued a note, saying a Chinese tariff on US oil would increase world oil prices.
“If a punitive tariff of 25% is imposed as threatened, US oil will become prohibitively expensive for Chinese consumers and will therefore no longer be feasible for import,” Commerzbank said in a research note.
Energy prices
The August light, sweet crude contract fell $1.20 to settle at $72.94/bbl on July 5. The September price was down 96¢ to $70.63/bbl.
The NYMEX natural gas price for August dropped 3¢ to a rounded $2.84/MMbtu. The Henry Hub cash gas price was $2.86, down 1¢ from the July 3 price. US markets were closed July 4 for the Independence Day holiday.
Ultralow-sulfur diesel for August increased by nearly 1.5¢ to a rounded $2.18/gal. The NYMEX reformulated gasoline blendstock for August gained 1¢ to a rounded $2.13/gal.
Brent crude oil for September decreased 85¢ to $77.39/bbl on London’s International Commodity Exchange. The October contract dropped 79¢ to $77.10/bbl. The gas oil contract for July was $671/tonne on July 5. The July 4 price was unavailable.
The OPEC basket of crudes average price for July 5 was $75.21, down 17¢.
Contact Paula Dittrick at [email protected].
