The light, sweet crude oil price for July delivery fell $1.80 on the New York market June 16 to settle at $46.21/bbl while the Brent crude oil price for August delivery fell $1.78 to $47.19/bbl. Analysts said oil traders were anxious because the UK might leave the European Union.
The June 16 settlement marked the largest single-day loss for light, sweet crude oil prices since April and the lowest Brent front-month price since May 10.
Oil fell for six consecutive trading sessions on the New York market as of June 16 but were climbing in early June 17 trading.
Analysts largely attributed the series of oil price declines to concerns that an upcoming British referendum to exit the European Union could disrupt financial markets and the economies worldwide.
Analysts also noted that a lingering world oil oversupply was a negative factor for oil prices despite recent disruptions by wildfires in Canada and pipeline attacks in Nigeria.
US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, dropped 900,000 bbl for the week ended June 10 compared with the previous week, the US Energy Information Administration said.
The Petroleum Status Report estimated US crude inventories at 531.5 million bbl as of June 10, remaining at historically high levels for this time of year (OGJ Online, June 15, 2015).
EIA said US oil production fell 29,000 bbl to 8.72 million b/d for the week ended June 10.
Societe Generale analysts said, “While the outlook for global oil fundamentals remains constructive with slight global crude and product draws expected in the second half of this year, the current mood in the oil markets is risk averse.”
Regarding natural gas in underground storage across the Lower 48, EIA estimated levels at 3.04 tcf as of June 10, a net increase of 69 bcf from the previous week.
Stocks were 633 bcf higher than last year at this time and 704 bcf above the 5-year average of nearly 2.34 tcf, the Gas Storage Report said. Analysts said low gas demand coupled with strong production contributed to the storage levels.
Energy prices
The August crude oil contract on the New York Mercantile Exchange dropped $1.76 on June 16, settling at $46.74/bbl.
Natural gas for July dropped 1.5¢ to a rounded $2.58/MMbtu on NYMEX. The Henry Hub cash price was down 1¢ to $2.61/MMbtu.
Heating oil for July delivery declined 5.5¢ to a rounded $1.42/gal. The price for reformulated gasoline stock for oxygenates blending for July dropped 3.6¢ to a rounded $1.47/gal.
The September Brent crude contract on London’s ICE was down $1.77 to $47.76/bbl. The July gas oil contract settled at $423.50/tonne on June 16, down $17.50.
The Organization of Petroleum Exporting Countries’ basket of crudes price for June 16 was $44.03/bbl, down $1.33.
Contact Paula Dittrick at [email protected].