Light, sweet crude oil prices rose for a second consecutive day on July 18 in New York but dropped in early July 19 trading as market participants considered a rising US oil inventory and rising production.
The US Energy Information Administration said crude oil inventories, excluding the Strategic Petroleum Reserve, increased by 5.8 million bbl to an estimated total of 411.1 million bbl for the week ended July 13 (OGJ Online, July 18, 2018).
Analysts surveyed by The Wall Street Journal in advance had forecast the inventory would drop.
US crude oil production reached 11 million b/d for the week ended June 13, up 100,000 b/d from the previous week, EIA’s Weekly Petroleum Status Report said.
Brent crude oil prices for September and October settled just under $73/bbl on the London market July 18.
“On the supply side, production in Libya has staged a partial comeback, a release from the US Strategic Petroleum Reserve has become a growing possibility, and the possibility has emerged that the US government introduces some waivers around the Iranian sanctions,” Morgan Stanley analysts wrote in a research note.
Ole Hansen, head of commodity strategy at Saxo Bank, said earlier this month that this year started out strong for oil prices but a multi-month rally “ran out of steam” after the Organization of Petroleum Exporting Countries agreed to increase production.
Hansen suggests oil demand growth could begin to slow among emerging market economies next year.
Energy prices
The New York Mercantile Exchange August light, sweet crude contract rose 68¢ to close at $68.76/bbl on July 18. The September price settled up 59¢ to $67.75/bbl. The NYMEX natural gas price for August fell by nearly 2¢ to a rounded $2.72/MMbtu. The Henry Hub cash gas price declined 6¢ to $2.72/MMbtu.
Ultralow-sulfur diesel for August increased 2¢ to a rounded $2.09/gal. The NYMEX reformulated gasoline blendstock for August rose 1¢ to a rounded $2.04/gal.
Brent crude oil for September climbed 74¢ to $72.90/bbl on London’s International Commodity Exchange. The October contract increased 75¢ to $72.99/bbl. The gas oil contract for August was $631/tonne, down $1.25.
The OPEC basket of crudes average price for July 18 was $69.98/bbl, down 40¢.
Contact Paula Dittrick at [email protected].
