Oil prices gained modestly on the New York market May 20, settling above $63/bbl while Brent crude oil prices in London fell slightly to settle under $72/bbl.
Light, sweet oil prices rose to their highest level in nearly 3 weeks on May 20, which analysts attributed to US-Iran tensions and major crude producers, including Saudi Arabia, suggesting they might keep existing production-cut targets until Dec. 31.
US oil future prices gained the day after a May 19 monitoring committee meeting of the Organization of Petroleum Exporting Countries. Delegates at the committee meeting indicated they might maintain current production levels to limit world oil supplies.
The committee and some non-OPEC oil producers, including Russia, met in Jeddah, Saudi Arabia, to discuss oil supply and demand in preparation for a June OPEC meeting in Vienna where any decision will be made.
The group agreed in December 2018 to reduce production by a total of 1.2 million b/d. That agreement expires in June unless it is extended.
Sara Vakshouri, president of SVB Energy International in Washington, DC, said OPEC monitoring committee members are trying to determine Iran’s oil sales given US oil sanctions against that country.
“On the other side, the global inventories, particularly US inventories, are high and are still rising, which suggests there is no lack of supplies and the market is somehow oversupplied,” Vakshouri said.
Meanwhile, oil investors are concerned about possible disruption to oil flow from Saudi Arabia and the Persian Gulf following recent damage to Saudi tankers and other infrastructure. Saudi officials have called the tanker attacks an “act of sabotage” but did not say who was responsible.
Energy prices
Crude oil on the New York Mercantile Exchange for June gained 34¢ to settle at $63.10/bbl on May 20 while the July contract increased 29¢ to settle at $63.21/bbl.
NYMEX natural gas for June gained 4¢ to settle at $2.67/MMbtu.
Ultralow-sulfur diesel for June decreased by 2¢ to a rounded $2.07/gal. The NYMEX reformulated gasoline blendstock for June dropped about 4¢ to a rounded $2.01/gal.
Brent crude for July fell 24¢ to $71.97/bbl. The August price decreased 10¢ to settle at $71.16/bbl.
The gas oil contract for June fell $5.50 to $651.50/tonne on May 20.
The average for OPEC’s basket of crudes was $72.47/bbl on May 20, up 10¢.
Contact Paula Dittrick at [email protected].
