Oil front-month contracts on the New York Mercantile Exchange and the Intercontinental Exchange in London settled with mild price declines Feb. 21 while product prices rallied as refiners cut crude purchases during seasonal refinery maintenance.
A possible US-China trade deal appeared to be emerging, sources told Reuters on Feb. 21. China and US officials hope to reach agreement by Mar. 1, the end of a 90-day truce as agreed during December 2018 by US President Donald Trump and Chinese President Xi Jinping.
“Anything positive…on [US-China] trade talks will boost the oil price,” said Oliver Jakob of Petromatrix. Jakob noted low trading volumes on Feb. 21, adding that “US data on crude and products was mixed so the market didn’t really react.”
The US Energy Information Administration reported US crude oil production reached a record 12 million b/d for the week ended Feb. 15. EIA has forecast US crude production will average 12.4 million b/d in 2019.
“We see total US crude production hitting 13 million b/d by year end with 2019 averaging 12.5 million b/d,” Citibank said after the EIA released its weekly report.
EIA’s Weekly Petroleum Status Report also said US crude exports continued rising, reaching a record 3.607 million b/d for the week ended Feb. 15.
Citibank bankers suggest US production could reach 4.6 million b/d of gross crude exports by Dec. 31 compared with 3.6 million b/d for the week ended Feb. 15.
Energy prices
The April contract for light, sweet crude oil on the New York Mercantile Exchange declined 20¢ to settle at $56.96/bbl on Feb. 21. The contract for May delivery fell 18¢ to settle at $57.46/bbl.
NYMEX natural gas for March gained 6¢ to a rounded $2.70/MMbtu on Feb. 21.
Ultralow-sulfur diesel for March gained 1.8¢ to a rounded $2.04/gal. The NYMEX reformulated gasoline blendstock for March increased 1.6¢ to a rounded $1.61/gal.
Brent crude for April delivery edged down 1¢ to settle at $67.07/bbl while the May contract gained 6¢ to settle at $67.19/bbl. The gas oil contract for March rose $4.50 to $621/tonne on Feb. 21.
The average price for the Organization of Petroleum Exporting Countries’ basket of crudes was $66.50/bbl on Feb.21, up 53¢.
Contact Paula Dittrick at [email protected].
