MARKET WATCH: Crude oil benchmarks end week with price drop

Jan. 14, 2019
The light, sweet crude oil price for February dropped $1/bbl on the New York market Jan 11 while Brent crude settled more than $1/bbl lower on London’s Intercontinental Exchange. Price declines by the benchmarks ended more than a week of consecutive price gains.

The light, sweet crude oil price for February dropped $1/bbl on the New York market Jan 11 while Brent crude settled more than $1/bbl lower on London’s Intercontinental Exchange. Price declines by the benchmarks ended more than a week of consecutive price gains.

Separately, the Organization of Petroleum Exporting Countries’ secretary general said he was “cautiously optimistic” of a resolution to the US-China trade war, which threatens crude imports by China. Any drop in China’s crude oil imports threatens OPEC income.

OPEC Sec. Gen. Mohammed Barkindo said he is concerned about an ongoing US-China trade war’s potential to disrupt oil demand growth in major Asian markets. China is the world’s largest crude importer, having bought nearly 19% of total crude imports in 2017.

In comments elsewhere, Saudi Energy Minister Khalid al-Falih discussed the progress of implementing 1.2 million b/d in production cuts by OPEC and some non-OPEC producers. Those cuts became effective in January.

“We’ve already done it, we’ve done enough,” al-Falih told CNBC on Jan 13 in Abu Dhabi when asked about Saudi efforts to balance oil markets this year. “Not only the kingdom but other countries, we’ve heard from the [United Arab] Emirates, I’ve talked repeatedly to my colleagues in Iraq, they’ve already taken action.”

But al-Falih added that non-OPEC producer Russia was implementing cuts slower than he had expected.

“Russia has started, slower than I’d like, but they’ve started…. I am sure as they did as in 2017 they’ll catch up and be a positive contributor to rebalancing the market,” he told CNBC.

Energy prices

The February light, sweet crude contract on the New York Mercantile Exchange dropped $1 to settle at $51.59/bbl on Jan. 11 while the contract for March delivery also fell $1 to settle at $51.91/bbl.

NYMEX natural gas for February rose 13¢ to close at a rounded $3.10/MMbtu on Jan. 11.

Ultralow-sulfur diesel for February was down 2.6¢ to a rounded $1.89/gal. The NYMEX reformulated gasoline blendstock for February declined by 3¢ to a rounded $1.40/gal.

Brent crude for March dropped $1.20 to $60.48/bbl on London’s ICE, while the April contract fell $1.18 to settle at $60.63/bbl. The gas oil contract for February declined $2 to $568.50/tonne on Jan. 11.

The average price for OPEC’s basket of crudes was $60/bbl on Jan. 11, up 54¢.

Contact Paula Dittrick at [email protected].