Light, sweet crude oil prices for November and December delivery declined slightly but each contract settled above $75/bbl on the New York market Oct. 2, staying near 4-year highs as did Brent crude oil. Brent for December and January dropped but held above $84/bbl.
Market participants awaited full implementation of US oil sanctions against Iran in early November. One analyst noted that traders already are making transactions without Iranian crude.
“Sanctions are in full effect in terms of the physical market,” Bjarne Schieldrop, SEB Markets chief commodities analyst, told the Wall Street Journal. Traders already are buying oil for November delivery or later. They are “not doing it with Iran,” Schieldrop said.
Sara Vakhshouri, president of SVB Energy International in Washington, DC, said Iran’s oil exports fell to a rounded 1.69 million b/d in September from 1.85 million b/d in August.
Vakhshouri said Iran is offering steeper discounts on condensate than crude oil. Most of the unsold cargoes in tankers already at sea are condensate because South Korea has halted its purchases of Iranian condensate.
Iran has started storing crude oil and condensate in tank farms outside of Iran, she said.
Given lower exports, Iran will adjust its production by reducing oil from its southern fields. Almost all of Iran’s the production drop so far has been done in the Southern fields, Vakhshouri said, adding West Karun oil fields production will continue growing.
Iran will decide how to adjust its production based on its November exports, she said.
She said Iran’s oil production was 3.51 million b/d in September, down from 3.59 million b/d in August.
Energy prices
The light, sweet crude contract for November delivery on the New York Mercantile Exchange dropped 7¢ to $75.23/bbl on Oct. 1. The December contract declined 10¢ to settle at $75.04/bbl.
The NYMEX natural gas price for November was up 7¢ to a rounded $3.16/MMbtu. The Henry Hub cash gas was unavailable.
Ultralow-sulfur diesel for November fell a fraction of a penny to remain at a rounded $2.41/gal. The NYMEX reformulated gasoline blendstock for November also decreased less than 1¢ to settle for a second day at a rounded $2.13/gal.
Brent crude oil for December fell 18¢ to $84.80/bbl on London’s International Commodity Exchange. The January contract dropped 16¢ to $84.35/bbl. The gas oil contract for October gained $6.75 to settle at $740.75/tonne on Oct. 1.
OPEC’s basket of crudes for Oct. 2 averaged $83.28/bbl, up $1.70.
Contact Paula Dittrick at [email protected]