Crude oil benchmark prices settled over $1 higher Dec. 13 as signs point to an emerging global oil market deficit.
News of a drop in US crude stocks was reported Dec. 12. The weekly Petroleum Status Report showed US oil production dropped 100,000 b/d to 11.6 million b/d for the week ended Dec. 7. Couple that with the agreement—assuming adhesion—by the Organization of Petroleum Exporting Countries and certain non-OPEC members to cut a total of 1.2 million b/d of production for 6 months, and you could have a supply deficit by second-quarter 2019, according to the International Energy Agency.
Commerzbank analysts, in a Dec. 13 research note, said, “We expect most of the agreed production cuts to be implemented, which will eliminate the market oversupply during the course of the year and help Brent gain a foothold again. We envisage a Brent price of $70/bbl at the end of 2019, and indeed at the end of 2020.”
Energy prices
The January light, sweet crude contract on the New York Mercantile Exchange rose $1.43 to close at $52.58/bbl.
Natural gas futures for January declined 2¢ to close at a rounded $4.12/MMbtu on Dec. 13.
Ultralow-sulfur diesel for January edged up 3¢ to a rounded $1.88/gal. The NYMEX reformulated gasoline blendstock for January increased 6¢ to a rounded $1.48/gal.
Brent crude oil for February gained $1.30 to $61.45/bbl on London’s International Commodity Exchange. The gas oil contract for January was $557.50/tonne, down $7.50.
OPEC’s basket of crudes for Dec. 13 averaged $58.67/bbl, down 53¢ from the previous day.
