Light, sweet crude oil closed slightly above $56/bbl on Feb. 19 after having briefly reached a 2019 high of $56.39/bbl, but prices fell in early trading Feb. 20 following a US government forecast that US production from unconventional plays will reach a record during March.
The US Energy Information Administration forecast US shale production will reach 8.4 million b/d next month.
Separately, analysts said US sanctions on Iran and Venezuela have reduced availability of crude oil that yields middle distillates. Barclays analysts said US sanctions meant that “although there is no lack of resources, there is an increasing lack of access to them.”
Saudi Energy Minister Khalid al-Falih said Feb. 20 that he hopes the oil market will be balanced by April with no remaining gap in certain supplies following US sanctions on Iran and Venezuela.
BNP Paribas analysts said, “US oil production growth, driven by shale, will be increasingly exported in greater volumes to international markets.” BNP Paribas also expects world economic growth will slow this year.
Energy prices
The March contract for light, sweet crude oil on the New York Mercantile Exchange gained 50¢ to settle at $56.09/bbl on Feb. 19. The contract for April delivery rose 47¢ to settle at $56.45/bbl.
NYMEX natural gas for March increased by nearly 4¢ to $2.66/MMbtu on Feb. 19.
Ultralow-sulfur diesel for March decreased nearly 3¢ to a rounded $1.99/gal. The NYMEX reformulated gasoline blendstock for March decreased 1¢ to a rounded $1.56/gal.
Brent crude for April delivery edged up 20¢ to settle at $66.45/bbl while the May contract climbed 25¢ to settle at $66.47/bbl. The gas oil contract for March dropped $5 to $615.50/tonne on Feb. 19.
The average price for the Organization of Petroleum Exporting Countries’ basket of crudes was $66.03/bbl on Feb. 19, down 24¢.
Contact Paula Dittrick at [email protected].
