Crude oil prices retreated slightly on both the New York and London markets Oct. 8 with light, sweet crude prices dropping 5¢/bbl while Brent crude prices dropped about 24¢/bbl, attributed, in part, to indications that market disruption from pending sanctions on Iranian supply may be less impactful than expected.
“The US appears to be abandoning its tough stance on buyers of Iranian oil,” said Carsten Fritsch, an analyst at Commerzbank, in an Oct. 8 research note. American sanctions banning purchases of Iranian crude are set to begin next month, but US officials are reportedly in talks with countries seeking exemptions.
“It appears that consumer countries are to be given more time, after all, to replace their oil shipments from Iran so long as they at least reduce them significantly,” Fritsch said.
Meantime, Saudi Arabia told Bloomberg that it is now pumping 10.7 million b/d, and can add another 1.3 million b/d, if needed, to help offset Iranian supply disruptions. Questions about how quickly the additional barrels could be reached and if they’d be sustainable, remain.
Energy prices
The light, sweet crude contract for November delivery on the New York Mercantile Exchange was down 5¢ to $74.29/bbl on Oct. 8. The December contract was down 9¢ to settle at $74.17/bbl.
The NYMEX natural gas price for November was up 12¢ to a rounded $3.26/MMbtu. The Henry Hub cash gas was unavailable.
Ultralow-sulfur diesel for November was up less than 1¢ to remain at a rounded $2.39/gal. The NYMEX reformulated gasoline blendstock for November increased less than 1¢ to settle at a rounded $2.09/gal.
Brent crude oil for December dropped 24¢ to $83.91/bbl on London’s International Commodity Exchange. The January contract fell 25¢ to $83.54/bbl. The gas oil contract for October fell $5.50 to $735.75/tonne.
The Organization of Petroleum Exporting Countries’ basket of crudes for Oct. 8 averaged $81.88/bbl, down $1.36.
