Brent crude oil dropped modestly on the London market Apr. 15 but still settled above $71/bbl following reports of lower Venezuelan and Iranian exports because of US sanctions. Renewed civil unrest in Libya also raised oil supply concerns.
Khalifa Haftar’s Libyan National Army continues fighting forces backed by the internationally recognized Libyan government.
“Collapsing Venezuelan oil output and sanctioned Iranian exports have a put big question mark over supply,” said Norbert Ruecker, a Julius Baer analyst. “With the many supply threats, the market mood turns more bullish by the day, and this should support prices over the coming weeks.”
Sara Vakhshouri, president of SVB Energy International in Washington, DC, noted some of Iran’s West Karu oil fields have been flooded, shutting production for a few weeks.
“We do expect a lower oil production” in April and May, Vakhshouri told OGJ in an e-mail. She estimated Iran’s March production at 2.69 million b/d and its March exports at 1.1-1.2 million b/d.
Vakhshouri expects US President Donald Trump’s administration will extend some existing waivers on Iranian sanctions to certain countries.
“We expect…waivers extension in May,” she said. “We think there are very high chances that China and India and perhaps Turkey will receive waivers but with further cuts compared to the current 180-day waivers. This will put Iran’s oil exports somewhere around 470,000-500,000 b/d.”
Energy prices
The May contract for light, sweet crude oil on the New York Mercantile Exchange dropped 49¢ to settle at $63.40/bbl on Apr. 15. The price for June delivery was down 46¢ to settle at $63.56/bbl.
NYMEX natural gas for May dropped 7¢ to $2.59/MMbtu.
Ultralow-sulfur diesel for May edged down by nearly 1¢ to a rounded $2.06/gal. The NYMEX reformulated gasoline blendstock for May declined 2.5¢ to settle at $2.01/gal.
Brent crude for June fell 37¢ to settle at $71.18/bbl. The July price fell 32¢ to settle at $70.74/bbl.
The gas oil contract for May dropped $3.25 to $629.75/tonne on Apr. 15.
The Organization of Petroleum Exporting Countries’ basket of crudes for Apr. 15 was $70.21/bbl, down 23¢.
Contact Paula Dittrick at [email protected].
