Light, sweet crude oil for September delivery rose modestly on the New York market Aug. 20 to settle above $66/bbl while market participants anticipate a loss of Iranian crude exports after unilateral US sanctions are implemented. Brent crude oil for October also rose modestly, settling above $72/bbl in London Aug. 20.
US President Donald Trump in May announced a US exit from an international agreement that lifted sanctions in exchange for Iran’s cooperation regarding its nuclear program.
Trump plans US economic sanctions against Iran with some sanctions taking effect this month. Oil sanctions are set to be implemented by early November.
In an Aug. 21 note, Commerzbank analysts said, “Prices are being supported by the prospect of lower oil supply from Iran.”
Commerzbank analysts added, “One key actor has pulled out of its business with Iran—the French oil giant Total SA—in a bid to preserve its US business [and] other European companies are likely to follow suit in the coming weeks.”
Iranian Oil Minister Bijan Zanganeh confirmed Aug. 20 to the Wall Street Journal and other media outlets that Total has left a natural gas project in Iran’s South Pars field (OGJ Online, Aug. 20, 2018).
Energy prices
The light, sweet crude contract for September delivery on the New York Mercantile Exchange gained 52¢ to close at $66.43/bbl on Aug. 20. The October contract increased 21¢ to settle at $65.42/bbl.
The NYMEX natural gas price for September edged down less than a penny to $2.94/MMbtu. The Henry Hub cash gas price increased 2¢ to $2.99/MMbtu.
Ultralow-sulfur diesel for September gained 1¢ to $2.11/gal. The NYMEX reformulated gasoline blendstock for September added 3¢ to $2.01/gal.
Brent crude oil for October rose 38¢ to $72.21/bbl on London’s International Commodity Exchange. The November contract increased 50¢ to settle at $72.57/bbl. The gas oil contract for September was $644.75/tonne on Aug. 20, down $2.
The Organization of Petroleum Exporting Countries’ basket of crudes for Aug. 20 was not immediately available.
Contact Paula Dittrick at [email protected].
