MARKET WATCH: Oil prices volatile on Russia, Iran comments
Light, sweet crude oil prices on the New York market for January delivery fell $1.90 on Nov. 25 to settle at about $46/bbl, ending the week down by 30¢. The US benchmark crude price has dropped in 4 of the last 5 weeks. Prices continued the downward trend in early Nov. 28 trading.
Brent crude oil prices on the London market for the January contract fell $1.76 on Nov. 25 to settle near $47.25/bbl. Brent managed to gain 38¢ for the week because of gains made earlier.
Market participants continue to closely monitor oil-supply comments made from members of the Organization of Petroleum Exporting Countries in advance of the cartel’s Nov. 30 meeting in Vienna.
In September, OPEC proposed capping production at 32.5-33 million b/d. The cartel in October produced a record 33.64 million b/d (OGJ Online, Nov. 11, 2016).
The Wall Street Journal reported Nov. 24 that OPEC wants Russia and other non-OPEC producers to cut production by 500,000-600,000 b/d.
On Nov. 25, OPEC officials said Saudi leaders likely would postpone a Nov. 28 meeting with non-OPEC producers pending an OPEC agreement that Saudi officials could take to non-OPEC countries. The WSJ reported Saudi Arabia supports efforts to cut OPEC output to 32.5 million b/d.
Iran said Nov. 26 that it was negotiating an exemption with OPEC from cutting its production, the third-highest in the 14-nation OPEC cartel behind Saudi Arabia and Iraq.
Russia Energy Minister Alexander Novak said on Nov. 24 that Moscow officials were talking about a production freeze.
Energy prices
The January crude oil contract on the New York Mercantile Exchange dropped $1.90 on Nov. 25 to close at $46.06/bbl. The February contract tumbled $1.86 to $47/bbl.
The natural gas contract for December climbed nearly 6¢ to a rounded $3.08/MMbtu. The Henry Hub spot market for natural gas was closed Nov. 25.
Heating oil for December fell 4.7¢ to a rounded $1.47/gal. Reformulated gasoline stock for oxygenate blending for December dropped nearly 5¢ to a rounded $1.37/gal.
The Brent crude contract for January on London’s ICE dropped $1.76 to $47.24/bbl. The February contract fell $1.78 to $48.24/bbl. The December gas oil contract gained 50¢ to $445.75/tonne.
The average price for OPEC’s basket of benchmark crudes on Nov. 25 was down 34¢ to $45.22/bbl.
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.