Light, sweet crude oil for May delivery dipped to settle just below $60/bbl on Mar. 21, while Brent prices for May settled under $68/bbl. Production cuts by the Organization of Petroleum Exporting Countries and US sanctions against Iran and Venezuela are contributing to a tightening of supply, buoying prices near 2019 highs.
OPEC’s crude output hit 30.7 million b/d in February, down from 32.8 million b/d in mid-2018 and cuts are expected to continue.
“With the driver of the OPEC bus, Saudi Arabia, showing no signs of wavering in the face of renewed pressure from Washington, we believe that OPEC is likely to extend the deal for the duration of 2019,” RBC said in a Reuters report.
Meantime, US restrictions on importing countries could decrease Iran’s crude exports to below 1 million b/d from May (OGJ Online, Nov. 29, 2018). And “Venezuelan exports to the US have finally dried up,” following sanctions put in place by the US earlier this year, ANZ bank was quoted as saying in the report (OGJ Online, Jan. 31, 2019).
Energy prices
The May contract for light, sweet crude oil on the New York Mercantile Exchange decreased 25¢ to settle at $59.98/bbl on Mar. 21. The contract for June delivery decreased 28¢ to settle at $60.20/bbl.
NYMEX natural gas for April was up less than 1¢ to settle at $2.82/MMbtu for a second day.
Ultralow-sulfur diesel for April decreased 2¢ to $1.98/gal. The NYMEX reformulated gasoline blendstock for April gained a rounded 1¢ to $1.92/gal.
Brent crude for May delivery settled at $67.86/bbl, down 64¢. The contract for June delivery decreased 60¢ to settle at $67.67/bbl.
The gas oil contract for April decreased $8.25 to $610.25/tonne on Mar. 21.
The average price for OPEC’s basket of crudes was $67.78/bbl on Mar. 21, up 24¢.
