Oil prices on Friday, Nov. 23, reached low levels not seen since October 2017 as waivers on Iran sanctions and rising production from Saudi Arabia and Russia support a surplus scenario.
Light, sweet crude oil prices dropped more than $4 Nov. 23 on the New York market while Brent crude oil prices in London fell by $3.80 the same day.
“The combination of the US granting waivers on Iran sanctions to eight countries coupled with rising production from Saudi Arabia and Russia has swung the market from a supply/demand deficit to a likely surplus in 4Q18 and 2019 if OPEC holds production steady. Based on the success of its recent efforts to support crude oil prices with production cuts and the wounds from the November 2014 decision not to cut production, we expect OPEC to take action at its December 6 meeting,” said Stifel analysts in a note Nov. 25.
“While it is difficult to pinpoint the specific magnitude of the cut, a reduction of 1.0 million b/d off the approximately 32.9 million b/d of October 2018 OPEC production would be a reasonable expectation,” the analysts continued.
Energy prices
The January light, sweet crude contract on the New York Mercantile Exchange closed Nov. 23 at $50.42/bbl, down $4.21. The February contract also dropped $4.21 to $50.59/bbl.
Natural gas for December fell 14¢ to close at $4.30/MMbtu on Nov. 23.
Ultralow-sulfur diesel for December decreased 9¢ to $1.88/gal. The NYMEX reformulated gasoline blendstock for December fell 12¢ to $1.39/gal.
Brent crude oil for January plunged $3.80 to $58.80/bbl on London’s International Commodity Exchange. The February contract fell $3.84 to $59.04/bbl. The gas oil contract for December was $576.75/tonne.
The Organization of Petroleum Exporting Countries’ basket of crudes for Nov. 23 reached $60.27/bbl, down $1.81.
