US light, sweet crude oil future prices for the week ended Apr. 5 closed above $63/bbl on the New York market while Brent crude oil for June delivery settled above $70/bbl in London that day.
With this latest settlement, Brent breaks a psychological threshold, which analysts believe will encourage more oil investment. The oil price rally comes as the US summer driving season approaches and with it, rising fuel demand.
Barclays issued a research note saying its oil outlook “is mildly positive as we forecast output restrain and robust demand to buoy prices.”
Ole Hansen, Saxo Bank head of commodity strategy, said renewed fighting in Libya helped support Brent oil prices to break above $70/bbl.
Unrest in Libya “raises the risk of a civil war between numerous militias, some supported by foreign governments,” Hansen said. “Libya’s production reached 1.1 million b/d last month according to a Bloomberg survey.”
Although Libya’s oil fields are far from the latest rebellion, Hansen said, “It nevertheless raises the temperature a few more notches. Not least given ongoing production cuts from the Organization of Petroleum Exporting Countries and Russia together with the sharp reductions due to crisis and sanctions from Venezuela and Iran.”
Hansen also noted that US President Donald Trump faces “the highest seasonal cost of US gasoline since 2014,” despite his earlier tweets to OPEC in which he sought lower prices.
Energy prices
The May contract for light, sweet crude oil on the New York Mercantile Exchange gained 98¢ to settle at $63.08/bbl on Apr. 5. The price for June delivery added 96¢ to settle at $63.15/bbl.
NYMEX natural gas for May was up 2¢ to a rounded $2.66/MMbtu.
Ultralow-sulfur diesel for May gained nearly 3¢ to a rounded $2.04/gal. The NYMEX reformulated gasoline blendstock for May rose nearly 3¢ to settle at a rounded $1.97/gal.
Brent crude for June contract gained 94¢ to settle at $70.34/bbl and the July price added 91¢ to settle at $69.93/bbl.
The gas oil contract for April rose $2.25 to settle at $618/tonne on Apr. 5.
OPEC’s basket of crudes for Apr. 5 was $69.02/bbl, up 26¢.
Contact Paula Dittrick at [email protected].
