MARKET WATCH: NYMEX, Brent crude oil prices settle under $29/bbl

Light, sweet crude oil prices dropped nearly $1/bbl on the New York market on Jan. 20, the first day of US floor trading since the lifting of sanctions against Iran. Analysts and traders say the oil price decline could likely continue while Iranian oil exports add to already oversupplied world oil markets.
Jan. 20, 2016
2 min read

Light, sweet crude oil prices dropped nearly $1/bbl on the New York market on Jan. 20, the first day of US floor trading since the lifting of sanctions against Iran. Analysts and traders say the oil price decline could likely continue while Iranian oil exports add to already oversupplied world oil markets.

Floor trading was closed on the New York Mercantile Exchange on Jan. 18 in observance of the Martin Luther King Jr. holiday although there was electronic trading.

World oil prices are apt to continue falling, agreed the International Energy Agency’s first monthly report for 2016, citing growing crude oil supply.

IEA said the world could face an estimated excess 1.5 million b/d of crude supplies through this year’s first half. Markets will face enormous strain in absorbing new supplies from producers such as Iran, IEA said, adding the oil market will face its third successive year where supplies exceed demand by 1 million b/d.

Separately, the International Monetary Fund slashed its global growth forecast to 3.4% for 2016. IMF cited sharper downturns in many developing countries and a weaker-than-expected US expansion as the reasoning for cutting its previous forecast for 2016 global growth.

Energy prices

The February crude oil contract on the New York Mercantile Exchange declined 96¢ to settle at $28.46/bbl on Jan. 19. The March contract was down 82¢ to settle at $29.57/bbl.

The NYMEX natural gas contract for February dropped less than a penny to a rounded $2.09/MMbtu. The Henry Hub gas price was $2.20/MMbtu on Jan. 19, up 1¢ from Jan. 15.

Heating oil for February delivery dropped 2.6¢ to a rounded 91¢/gal. The price for reformulated gasoline stock for oxygenates blending for February was up 0.5¢ to a rounded $1.03/gal.

The March ICE contract for Brent crude gained 21¢ to settle at $28.76/bbl on Jan. 19, and the February contract was up 24¢ to $29.47/bbl. The ICE gas oil contract was $270.25/tonne on Jan. 19, down $8.25.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Jan. 19 was $23.85/bbl, up 27¢.

Contact Paula Dittrick at [email protected].

About the Author

Paula Dittrick

Senior Staff Writer

Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.

Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.

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