Crude oil benchmark prices rose moderately on New York and London markets Oct. 15 amid rising US-Saudi tensions after the disappearance and suspected killing of a dissent Saudi journalist (OGJ Online, Oct. 15, 2018).
US President Donald Trump has suggested some punishment if the Saudi government is found to have been involved in the disappearance of journalist Jamal Khashoggi who was last seen entering the Saudi consulate in Istanbul on Oct. 2.
In response to rising political tensions, the Saudis suggested they could retaliate by raising crude oil prices. Some analysts doubt the Saudis would raise prices over the US-Saudi tensions.
“I don’t think this is going to be the case,” said Olivier Jakob, head of consultancy Petromatrix. “Using oil as a weapon is the last bullet for any country so I don’t think they will do that because it would totally destroy their standing as a reliable source of energy.”
Other geopolitical tensions also are influencing prices. On Oct. 16, oil prices dropped during early trading in London, which analysts attributed to expectations that Saudi Arabia and Russia will fill the supply gap caused by reduced Iranian crude exports.
The US is scheduled to fully implement oil sanctions against Iran Nov. 4. Sanctions were announced as part of a US exit from an international agreement that previously lifted sanctions against Iran in exchange for Iran’s cooperation regarding its nuclear program.
Energy prices
The light, sweet crude contract for November delivery on the New York Mercantile Exchange gained 44¢ to $71.78/bbl on Oct. 15. The December contract gained 43¢ to settle at $71.61/bbl.
The NYMEX natural gas price for November rose 8¢ to a rounded $3.24/MMbtu.
Ultralow-sulfur diesel for November added less than 1¢ to a rounded $2.33/gal. The NYMEX reformulated gasoline blendstock for November edged up only a fraction of a penny to remain at $1.94/gal.
Brent crude oil for December increased 35¢ to $80.78/bbl on London’s International Commodity Exchange. The January contract gained 36¢ to $80.43/bbl. The gas oil contract for November fell $2.25 on Oct. 15 to close at $715.75/tonne.
The Organization of Petroleum Exporting Countries’ basket of crudes for Oct. 15 averaged $79.31/bbl, down 5¢.
Contact Paula Dittrick at [email protected].
