MARKET WATCH: Brent crude gains on US-Iran tensions

May 15, 2019
Light, sweet crude oil prices gained modestly to approach $62/bbl on the New York market by the May 14 settlement while the Brent contract for July gained $1/bbl to settle above $71/bbl for the first time in five trading sessions.

Light, sweet crude oil prices gained modestly to approach $62/bbl on the New York market by the May 14 settlement while the Brent contract for July gained $1/bbl to settle above $71/bbl for the first time in five trading sessions.

US President Donald Trump’s administration has ordered all non-emergency staff to leave Iraq immediately given US-Iran tensions after recent attacks against oil tankers in the Strait of Hormuz followed within days by drone attacks on Saudi Arabia infrastructure.

Drones carrying explosives targeted pumping stations and an east-west pipeline between the Eastern Province and Yanbu port on the Red Sea. Iran-allied Houthi rebels fighting a Saudi coalition in Yemen said they targeted the Saudi oil pipeline with armed drones, the Wall Street Journal reported.

Iran-allied militia in Iraq could target US citizens and soldiers, White House officials said as it told US non-emergency staff to leave Iraq. The US Embassy in Baghdad and the US Consulate in Erbil temporarily suspended normal visa services.

A brief statement posted online by the US Embassy in Iraq warned the US government has limited ability to provide emergency services to US citizens in Iraq.

The US, citing unspecified intelligence about increased Iranian threats, previously started a series of military deployments to the Middle East, including an aircraft carrier, a bomber task force, and other ships.

Energy prices

Crude oil on the New York Mercantile Exchange for June rose 74¢ to settle at $61.78/bbl on May 14 while the July contract climbed 75¢ to settle at $61.96/bbl.

NYMEX natural gas for June rallied on anticipated weather-driven demand. The June futures contract gained 3¢ to settle at $2.66/MMbtu after reaching a trading session high of $2.67/MMbtu.

Genscape Inc. reported a “hefty day/day drop” of more than 2.7 bcfd in its latest Lower 48 production estimate May 14, citing “widespread shoulder-season maintenance events.”

Ultralow-sulfur diesel for June increased 2¢ to a rounded $2.06/gal. The NYMEX reformulated gasoline blendstock for June gained 1¢ to a rounded $1.97/gal.

Brent crude for July was gained $1.01 to $71.24/bbl. The August price increased $1 to settle at $70.31/bbl.

The gas oil contract for June fell $3 to $636.25/tonne on May 13. The average for OPEC’s basket of crudes was $70.66/bbl on May 14, down 55¢.

Contact Paula Dittrick at [email protected].