Light, sweet crude oil prices for August fell slightly but held above $70/bbl on the New York market July 12 while Brent crude for September delivery rose by more than $1/bbl on the London market after having dropped more than $5/bbl the previous day.
Oil prices fluctuated this week upon reports that Libya is reopening four oil export ports and increasing crude production.
Some analysts say the return of Libyan crude to world oil markets could be mitigated by ongoing supply interruptions in Canada and Venezuela combined with an anticipated drop in Iranian oil exports. Unilateral US sanctions against Iran are scheduled to start Nov. 4.
Meanwhile, the US Energy Information Administration, the American Petroleum Institute, and the Organization of the Petroleum Exporting Countries all report tight oil supply. The International Energy Agency said spare oil capacity could be pushed to its limit as major producers increase production.
OPEC and Russia agreed in June to increase production amid concerns about high oil prices. The IEA said on July 12 that “production is climbing and may reach record levels.”
Market vulnerability likely will continue, IEA said in its monthly report, adding that oil demand growth is expected to stay strong despite higher prices.
“We retain our view that [oil demand] growth in 2018 will be 1.4 million b/d and about the same next year,” the IEA said.
Energy prices
The New York Mercantile Exchange crude oil futures for August and September diverged. August light, sweet crude contract edged down 5¢ to settle at $70.33/bbl on July 12. The September price rose 49¢ to $69.35/bbl.
The NYMEX natural gas price for August fell 3¢ to a rounded $2.80/MMbtu. The Henry Hub cash gas price held unchanged at $2.84/MMbtu.
Ultralow-sulfur diesel for August increased 2¢ to a rounded $2.12/gal. The NYMEX reformulated gasoline blendstock for August rose 1¢ to a rounded $2.07/gal.
Brent crude oil for September gained $1.05 to $74.45/bbl on London’s International Commodity Exchange. The October contract rose $1.11 to $74.44/bbl. The gas oil contract for July was $641, down $23.75.
The OPEC basket of crudes average price for July 12 was $72.15, down $2.25.
Contact Paula Dittrick at [email protected].
