MARKET WATCH: NYMEX crude oil price drops modestly pending inventory

Prices for light, sweet crude oil dropped modestly on the New York market on June 21 as the front-month contract expired with the settlement. Analysts said trading was light pending release of the US government’s weekly inventory report.

Oil price direction has been uncertain in recent days, swayed by changing poll forecasts regarding the outcome of the June 23 UK referendum on its European Union membership.

Brent crude oil reached back above $50/bbl briefly on the London market on June 20, managing to stay above that threshold by the June 21 settlement despite a slight loss for the daily trading session.

The US Energy Information Administration was scheduled to release its weekly oil and products inventory report on June 22.

Increasing oil supply from Canada is likely to boost the US oil inventory, which will restrict any price rallies, said Jim Ritterbusch, president of Ritterbusch & Associates, a consultant.

“It would appear that the strong spring price advance has run its course and that fresh highs are a slim possibility even when extending a view out across the rest of the summer,” Ritterbusch said in a note.

Some Canadian crude oil production had been disrupted by wildfires, which forced oil sand producers to repeatedly evacuate workers.

Energy prices

The July crude oil contract on the New York Mercantile Exchange dropped 52¢ on June 21, settling at $48.85/bbl. The July contract expired with the June 21 settlement. The August contract was down 11¢ to $49.85/bbl.

Natural gas for July was up 2¢ to a rounded $2.77/MMbtu on NYMEX. The Henry Hub cash price was up 3¢ to $2.76/MMbtu.

Heating oil for July delivery declined 1¢ to a rounded $1.52/gal. The price for reformulated gasoline stock for oxygenates blending for July rose 1¢ to a rounded $1.59/gal.

The August Brent crude contract on London’s ICE dropped 3¢ to $50.62/bbl. The September contract was down 3¢ to $51.26/bbl. The July gas oil contract settled at $446/tonne on June 21, down $4.50.

The Organization of Petroleum Exporting Countries’ basket of crudes price for June 21 was $46.02/bbl, down 22¢.

Contact Paula Dittrick at paulad@ogjonline.com.