Light, sweet crude oil prices closed just above $61/bbl on the New York market May 13 while Brent prices hovered around $70/bbl in London awaiting more details on repeated attacks within days to Saudi Arabian oil tankers and other vessels near the Strait of Hormuz.
The apparent acts of sabotage heightened US-Iran tensions as investigations continued into who was responsible.
Sara Vakhshouri, president of SVB Energy International in Washington, DC, said that repeated incidents in major oil production and transportation areas “creates uncertainty and panic in the market,” adding, “Particularly now that market expects much lower exports from Iran (and Venezuela) due to US sanctions.”
Vakhshouri noted Saudi Arabia and other members of the Organization of Petroleum Exporting Countries are withholding some production capacity as previously agreed upon to support oil prices. Some non-OPEC producers also are involved in the production-cut targets.
“We should also keep in mind that most of the US supplies are light crude oil and can’t…supply market demands for heavy crude oil, which is mostly produced in the Persian Gulf region and passes through the Strait of Hormuz,” Vakhshouri said.
Moty Kuperberg, director of Oil & Gas Dynamic Shipping in Haifa, Israel, told OGJ that world oil markets “can stay strong as there should be no oil shortage,” adding, “However, traders’ fears will probably be the top news.”
US officials said they have no evidence yet on who is responsible, but US President Donald Trump issued a warning to Iran on May 13.
“If they do anything, they will suffer greatly,” Trump said. “We’ll see what happens with Iran.”
Energy prices
Crude oil on the New York Mercantile Exchange for June fell 62¢ to settle at $61.04/bbl on May 13 while the July contract dropped 59¢ to settle at $61.21/bbl.
NYMEX natural gas for June edged up only a fraction of 1¢ to remain at a rounded $2.62/MMbtu.
Ultralow-sulfur diesel for June declined 1¢ to a rounded $2.04/gal. The NYMEX reformulated gasoline blendstock for June dropped 2.5¢ to a rounded $1.96/gal.
Brent crude for July was down 39¢ to $70.23/bbl. The August price decreased 33¢ to settle at $69.31/bbl.
The gas oil contract for May rose $3 to $639.25/tonne on May 13.
The average for OPEC’s basket of crudes was $71.21/bbl on May 13, up 55¢.
Contact Paula Dittrick at [email protected].
