MARKET WATCH: NYMEX, Brent crude oil prices diverge to end week

July 9, 2018
The light, sweet oil price for August delivery rose July 6 to settle at $73.80/bbl on the New York market amid concerns about possible supply disruptions even while some members of the Organization of Petroleum Exporting Countries are raising oil production.

The light, sweet oil price for August delivery rose July 6 to settle at $73.80/bbl on the New York market amid concerns about possible supply disruptions even while some members of the Organization of Petroleum Exporting Countries are raising oil production.

Meanwhile, the Brent crude oil price for September delivery fell to settle just above $77/bbl.

Saudi Arabia and Russia, which is outside of OPEC, reportedly increased oil production in recent weeks.

OPEC and some other major producers previously had reduced output by more than their production-cut targets. The cuts, effective Jan. 1, 2017, call for cuts of 1.8 million b/d total compared with late 2016 levels. Meanwhile, oil prices rose to 3-year highs.

In June, OPEC said the cartel collectively would comply 100% with the targets but no more, enabling higher production from members with spare capacity.

Analysts say doubts remain about whether that increased production can offset supply losses from Venezuela, Iran, and Libya.

Bank of America Merrill Lynch analysts wrote in a July 5 research note that Saudi Arabia has the spare capacity to increase production, but it seems unlikely that Saudi Arabia can fulfill the world supply gap created by US unilateral sanctions on Iranian oil.

“It appears the oil market has little confidence that Iran volumes can be easily replaced,” BOA said July 5.

Energy prices

The August light, sweet crude contract rose 86¢ to settle at $73.80/bbl on July 6. The September price was up 94¢ to $71.57/bbl.

The NYMEX natural gas price for August gained 21¢ to a rounded $2.86/MMbtu. The Henry Hub cash gas price was $2.85, down 1¢.

Ultralow-sulfur diesel for August decreased by 1¢ to a rounded $2.17/gal. The NYMEX reformulated gasoline blendstock for August fell 2¢ to a rounded $2.11/gal.

Brent crude oil for September decreased 28¢ to $77.11/bbl on London’s International Commodity Exchange. The October contract dropped 19¢ to $76.91/bbl. The gas oil contract for July was $664.50/tonne on July 6.

The OPEC basket of crudes average price for July 6 was $74.50, down 71¢.

Contact Paula Dittrick at [email protected].