MARKET WATCH: NYMEX oil price drops on slightly lower US rig count
The light, sweet crude oil prices for November rose modestly Sept. 21, settling above $70/bbl on the New York market for a third consecutive day before a weekend meeting of the Joint Ministerial Monitoring Committee (JMMC), representing nations coordinating oil supply.
Members of the Organization of Petroleum Exporting Countries and some non-OPEC countries met in Algiers on Sept. 23 to discuss production levels and world oil supply.
Representatives of OPEC’s Saudi Arabia along with non-OPEC Russia said they both want to comply with production-cut targets to which they agreed in late 2016. Compliance likely means additional production given reduced Iranian oil supply following US sanctions and falling Venezuela oil production given its economic crisis.
The US plans to fully implement oil sanctions against Iran in early November. In May, US President Donald Trump announced a US exit from an international agreement in which sanctions were lifted against Iran in exchange for cooperation regarding its nuclear program.
On Sept. 20, Trump wrote a tweet suggesting OPEC “get prices down.” He has previously written tweets regarding OPEC and oil prices.
“We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember,” Trump’s tweet said.
JMMC’s job is to recommend whether OPEC and non-OPEC producers should maintain production limits into next year. Some countries, such as Saudi Arabia, easily can produce more oil but other countries face production constraints.
Separately, Baker Hughes reported the US drilling rig count dropped 2 units to 1,053 rigs working for the week ended Sept. 21, up 118 units compared with the same period 1 year ago (OGJ Online, Sept. 21, 2018).
Energy prices
The light, sweet crude contract for November delivery on the New York Mercantile Exchange rose 46¢ to $70.78/bbl on Sept. 21. The December contract gained 31¢ to settle at $70.37/bbl.
The NYMEX natural gas price for October edged up less than 1¢ to remain at a rounded $2.98/MMbtu. The Henry Hub cash gas rose 2¢ to settle at $3.02/MMbtu.
Ultralow-sulfur diesel for October declined less than 1¢ to remain at a rounded $2.23/gal. The NYMEX reformulated gasoline blendstock for October added less than 1¢ to settle at a rounded $2.02/gal.
Brent crude oil for November added 10¢ to $78.80/bbl on London’s International Commodity Exchange. The December contract rose 2¢ to $78.24/bbl. The gas oil contract for October held unchanged at $688/tonne on Sept. 21.
OPEC’s basket of crudes for Sept. 21 averaged $77.08/bbl, down 5¢.
Contact Paula Dittrick at [email protected].
About the Author
Paula Dittrick
Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.