MARKET WATCH: Crude oil benchmark prices decline

Feb. 12, 2019
Light, sweet crude oil prices on the New York and London markets declined modestly Feb 11 pending release of a monthly production report by the Organization of Petroleum Exporting Countries. On Feb. 12, OPEC reported it reduced oil production in January by 797,000 b/d compared with December 2018. The cartel’s January production averaged 30.81 million b/d, OPEC’s secondary sources indicated.

Light, sweet crude oil prices on the New York and London markets declined modestly Feb 11 pending release of a monthly production report by the Organization of Petroleum Exporting Countries.

On Feb. 12, OPEC reported it reduced oil production in January by 797,000 b/d compared with December 2018. The cartel’s January production averaged 30.81 million b/d, OPEC’s secondary sources indicated.

The report confirmed OPEC is abiding by its production-cut agreement along with some non-OPEC producers, including Russia. They agreed to cut production by a total of 1.2 million b/d during this year’s first half. OPEC’s share of the production cut target is 800,000 b/d.

Saudi Arabia’s crude production was down 350,000 b/d in January compared with December, OPEC’s Monthly Oil Market Report showed.

During January, the cartel’s oil production decreased mostly in Saudi Arabia, the UAE, Kuwait, and Angola, while production increased in Nigeria.

Ole Hansen, Saxo Bank head of commodity strategy, noted last week that OPEC, led by Saudi Arabia, started reducing production in December. Meanwhile, he said weak macroeconomics are keeping oil prices rangebound despite OPEC’s dropping production.

“Upside potential looks [to be] the greatest, but the market is clearly worried about the potential negative impact on [world oil] demand should global [economic] growth continue to deteriorate,” Hansen said.

The International Energy Agency is scheduled to release its Oil Market Report on Feb. 13.

Energy prices

The March contract for light, sweet crude oil on the New York Mercantile Exchange decreased 31¢ to settle at $52.41/bbl on Feb. 11. The contract for April delivery also dropped 31¢ to settle at $52.78/bbl.

NYMEX natural gas for March rose nearly 6¢ to a rounded $2.64/MMbtu on Feb. 11.

Ultralow-sulfur diesel for March fell about 2¢ to a rounded $1.89/gal. The NYMEX reformulated gasoline blendstock for March decreased nearly 3¢ to a rounded $1.42/gal.

Brent crude for April delivery dropped 59¢ to settle at $61.51/bbl while the May contract decreased 51¢ to settle at $61.52/bbl. The gas oil contract for February held unchanged at $582.50/tonne on Feb. 11.

The average price for OPEC’s basket of crudes was $61.40/bbl on Feb. 11, up 3¢.

Contact Paula Dittrick at [email protected].