MARKET WATCH: NYMEX, Brent prices rally on IEA report of lessening supply

Light, sweet crude oil prices for March delivery rallied by $1.84/bbl Feb. 22 to close at $31.48 after the International Energy Agency released a report saying it expects US oil production to fall during 2016-17.

IEA forecast world oil supply and demand will start to rebalance in 2017, IEA spokesmen told IHS CERAWeek in Houston during a Feb. 22 news conference to release its annual Mid-term Oil Market Report.

“Drilling activity will continue to decline in the near term, and supply will follow,” the Paris-based agency said in its report, which emphasized the need for upstream investment in order for producers worldwide to satisfy future oil demand.

Separately, the Energy Information Administration was scheduled Feb. 24 to release its weekly inventory report of US crude oil and product supplies.

The March crude oil contract on the New York Mercantile Exchange gained $1.84 to settle at $31.48/bbl on Feb. 22. The April contract rose $1.64 to $33.39/bbl.

The NYMEX natural gas contract for March was up nearly 2¢ to a rounded $1.82/MMbtu. The Henry Hub gas price was up 3¢ to $1.84/MMbtu.

Heating oil for March delivery gained 3¢ to a rounded $1.05/gal. The price for reformulated gasoline stock for oxygenates blending for March jumped 4¢ to a rounded $1/gal on Feb. 22.

The April ICE contract for Brent crude gained $1.68 to $34.69/bbl, and the May contract dropped $1.67 to settle at $35.29. The ICE gas oil contract for March was $317.25/tonne, up $9.50.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $29.48/bbl, up 31¢.

Contact Paula Dittrick at paulad@ogjonline.com.