MARKET WATCH: NYMEX October oil contract dips under $44/bbl
The light, sweet crude oil contract for October delivery settled on the New York market Sept. 14 below $44/bbl, down by more than $1/bbl for a second consecutive day following release of the US oil inventory report, which also showed a second consecutive decline.
Commercial crude oil inventories, excluding the Strategic Petroleum Reserve, declined 600,000 bbl for the week ended Sept. 9 from the previous week’s total, the US Energy Information Administration reported (OGJ Online, Sept. 14, 2016).
The latest oil inventory total was 510.8 million bbl, the Petroleum Status Report said. US production rose 35,000 b/d for the week ended Sept. 9 to 8.493 million b/d, up 30,000 b/d in Alaska, and up 5,000 b/d across the Lower 48.
Raymond James & Associates Inc. in Houston issued a research note saying a consensus of analysts had expected an inventory build of 4 million bbl for the week ended Sept. 9 so market participants were surprised by a 600,000-bbl decline instead.
“Oil prices have been exhibiting a durable recovery from February’s 13-year lows though the pullback of July-August saw West Texas Intermediate briefly falling below $40/bbl last month,” RJA analysts said.
On world oil markets, Nigeria and Libya appeared ready to increase exports. Royal Dutch Shell PLC and ExxonMobil Corp. lifted force majeures on Nigerian exports. Libya planned to resume exports from its Ras Lanuf port (OGJ Online, Sept. 14, 2016).
“Nigeria’s problems are clearing and along with Libya, this could mean 1 million b/d of crude entering the market,” Olivier Jakob, Petromatrix analyst, said. “This will soon add up, and the market is reacting accordingly.”
Energy prices
The October crude oil contract on the New York Mercantile Exchange declined $1.32 on Sept. 14 to close at $43.58/bbl. The November contract was down $1.33 to $44.15/bbl.
The natural gas contract for October dropped 2¢ to a rounded $2.89/MMbtu. On the spot market, the Henry Hub gas price was down 2¢ to $3.04/MMbtu.
Heating oil for October dropped 4¢ to a rounded $1.38/gal. The price for reformulated gasoline stock for oxygenates blending was down 1.5¢ to a rounded $1.36/gal.
The November Brent crude contract on London’s ICE dropped $1.25 to settle at $45.85/bbl and the December contract declined $1.27 to settle at $46.31/bbl. The October gas oil contract settled at $409/tonne, down $5.
The average price for OPEC’s basket of 12 benchmark crudes on Sept. 14 was $42.56/bbl, down 35¢.
Contact Paula Dittrick at [email protected].
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.
