The light, sweet crude oil contract for July gained modestly to settle under $59/bbl on May 24, stabilizing after the biggest single-day drop of this year and ending a volatile week on the New York market. Brent crude also gained less than $1 to settle at under $69/bbl on May 24.
Oil benchmark prices collapsed on May 23, giving up more than $3/bbl each in London and New York. Since early April until May 23, US crude oil futures had settled above $60/bbl and Brent futures had settled above $70/bbl (OGJ Online, May 24, 2019).
US markets were closed May 27 for the Memorial Day holiday.
Many analysts expect oil prices will remain volatile until late June. The Organization of Petroleum Exporting Countries and other major oil producers meet in Vienna June 25-26 to discuss production policy.
Separately, US President Donald Trump is expected to talk about trade negotiations with China President Xi Jinping during the G20 meeting in Osaka, Japan, June 28-29.
Oil investors and traders also continue to closely watch US-Iran tensions in case of any disruptions to oil shipments in the Middle East, which could cause a spike in oil prices.
Trump said May 24 he plans to send 1,500 additional troops to the Middle East, part of a deployment sought by US military officials to counter what they call threats from Iran and its allies.
“Much of the tightening of the oil market is due to geopolitics, particularly recently,” Morgan Stanley analysts said in a research note. “We expect this will last for several quarters, but this is nevertheless a fickle basis for an oil price rally. Take that out of the equation and the oil market outlook would be very different.”
Energy prices
Crude oil on the New York Mercantile Exchange for July rose 72¢ to settle at $58.63/bbl on May 24 while the August contract also gained 72¢ to settle at $58.71/bbl.
NYMEX natural gas for June rose 2¢ to settle at a rounded $2.60/MMbtu.
Ultralow-sulfur diesel for June edged up less than 1¢ to a rounded $1.97/gal. The NYMEX reformulated gasoline blendstock for June gained 2¢ to a rounded $1.93/gal.
Brent crude for July was up by 93¢ to $68.69/bbl. The August price increased 97¢ to settle at $67.47/bbl.
The gas oil contract for June fell $2.75 to $604.75/tonne on May 24.
The average for OPEC’s basket of crudes was $67.40/bbl on May 24, down $1.16.
Contact Paula Dittrick at [email protected].
