MARKET WATCH: NYMEX oil prices drop awaiting US oil inventory

Nov. 28, 2018
Light, sweet crude oil prices for January and February fell slightly on the New York market Nov. 27 awaiting release of a weekly government estimate on US crude oil and product inventories. A Wall Street Journal survey of analysts and traders expected the US EIA to report a 500,000-bbl increase in crude supplies for the week ended Nov. 23.

Light, sweet crude oil prices for January and February fell slightly on the New York market Nov. 27 awaiting release of a weekly government estimate on US crude oil and product inventories.

A Wall Street Journal survey of analysts and traders expected the US Energy Information Administration to report a 500,000-bbl increase in crude supplies for the week ended Nov. 23. EIA’s report to scheduled for release on Nov. 28.

On Nov. 27, the American Petroleum Institute reported US crude supplies rose by 3.5 million bbl for the week ended Nov. 23. New York and London oil price benchmarks have fallen in recent weeks upon concerns about ample world oil supply.

Oil market participants await news from an upcoming meeting of the Organization of Petroleum Exporting Countries. OPEC and some non-OPEC members, led by Russia, meet Dec. 6 in Vienna to consider whether to cut production.

Analysts expect Saudi Arabia will propose production cuts of as much as 1.4 million b/d to support oil prices, which have fallen from 4-year highs reached in early October (OGJ Online, Nov. 27, 2018).

“A significant production cut on the part of OPEC and its allied non-OPEC producers at their meeting next week in Vienna will thus be needed to rebalance the oil market next year and ensure that [oil supplies] do not rise any further,” Commerzbank analysts said in a Nov. 28 research note.

OPEC “preparatory talks are…likely to be held on the fringes of the [Nov. 30-Dec. 1] G20 summit in Venezuela,” Commerzbank said. The G20 meeting will be held in Buenos Aires.

Energy prices

The January light, sweet crude contract on the New York Mercantile Exchange closed Nov. 27 at $51.56/bbl, down 7¢. The February contract also fell 7¢ to $51.73/bbl.

Natural gas futures for December gained 1¢ to close at a rounded $4.26/MMbtu on Nov. 27.

Ultralow-sulfur diesel for December edged down less than 1¢ to remain at $1.89/gal. The NYMEX reformulated gasoline blendstock for December decreased 2¢ to $1.42/gal.

Brent crude oil for January decreased 27¢ to $60.21/bbl on London’s International Commodity Exchange. The February contract fell 16¢ to $60.40/bbl. The gas oil contract for December was $578.50/tonne, down $7.25.

OPEC’s basket of crudes for Nov. 27 averaged $59.05/bbl, down 24¢.

Contact Paula Dittrick at [email protected].