Light, sweet crude oil prices on the New York market increased to end the week of Mar. 29 with a settlement back above $60/bbl after Reuters reported Russia was growing uneasy with existing production cut levels.
Reuters reported on Mar. 28 that Saudi Arabia is having a hard time convincing Russia to stay much longer in the OPEC-led pact cutting oil supply. Sources told Reuters that Russia might agree only to a 3-month extension next time those producers meet.
OPEC and some non-OPEC producers, including Russia, agreed in December 2018 to reduce oil supply by 1.2 million b/d from Jan. 1 for 6 months. Those producers are scheduled to meet again in June.
Separately, US President Donald Trump tweeted that the Organization of Petroleum Exporting Countries should increase production. “Very important that OPEC increase the flow of oil. World markets are fragile, price of oil getting too high. Thank you,” Trump wrote.
Oil prices rose during the first quarter. Investment bankers surveyed in March by the Wall Street Journal raised their forecast for Brent crude oil prices in 2019, supported by OPEC-led production cuts and by US sanctions on Iran and Venezuela.
WSJ reported bankers expect Brent will average just above $68/bbl for 2019. That compared with a forecast from February in which bankers forecast $67/bbl average for Brent for the year.
Ole Hansen, Saxo Bank head of commodity strategy, issued a research note saying the first quarter was the best in 3 years for commodities.
“Growth-dependent sectors of energy and industrial metals that provided most of the gains,” Hansen said. “Surging stock markets, OPEC production cuts, and Chinese stimulus helped to support a strong quarter for the energy and industrial metal sectors.”
Energy prices
The May contract for light, sweet crude oil on the New York Mercantile Exchange increased 84¢ to settle at $60.14/bbl on Mar. 29. The price for June delivery gained 80¢ to settle at $60.28/bbl.
NYMEX natural gas for May dropped 5¢ to $2.66/MMbtu.
Ultralow-sulfur diesel for April edged up less than 1¢ to remain at $1.97/gal. The NYMEX reformulated gasoline blendstock for April gained 1.5¢ to a rounded $1.90/gal.
Brent crude for May delivery held unchanged at $67.82 while the June contract rose 48¢ to settle at $67.58/bbl.
The gas oil contract for April gained $5.25 to settle at $605.25/tonne on Mar. 29. OPEC’s basket of crudes for Mar. 29 was unavailable.
Contact Paula Dittrick at [email protected]
