MARKET WATCH: NYMEX April crude oil contract settles under $54/bbl
Light, sweet crude oil prices for April dropped on the New York market Mar. 1 to settle just under $53.90/bbl while the May contract also dropped but settled at nearly $54.30/bbl. Oil prices fell on high US crude oil inventories and on a rising dollar.
The WSJ Dollar Index, which compared the US dollar to a basket of major currencies, was up 0.27% at 91.76. The dollar is gaining strength because economists believe the US Federal Reserve could raise interest rates yet this month. Oil is traded in US dollars so a stronger dollar makes oil more expensive for buyers starting out with other currencies.
The US Energy Information Administration said the nation’s crude oil inventories increased by 1.5 million bbl to 520.2 million bbl for week ended Feb. 24 (OGJ Online, Mar. 1, 2017).
The latest crude oil supply estimate marked a new US inventory high, which analysts attributed to imported crude oil from Saudi Arabia, Iraq, and Canada.
EIA estimated US oil production totaled more than 9 million b/d for a second consecutive week. For the week ended Feb. 24, EIA estimated production at 9.032 million b/d, which was up 31,000 b/d from the week ended Feb. 17.
The Lower 48 production was up 32,000 b/d to 8.483 b/d while Alaska’s production was 517,000 b/d, down 1,000 b/d.
The Petroleum Status Report showed US gasoline demand was about 6% lower than for the same period a year earlier, but Olivier Jakob, Petromatrix managing director, said data later could be revised to show stronger demand as has happened in the past.
Energy prices
The crude oil contract for April delivery on the New York Mercantile Exchange fell 18¢ on Mar. 1 to $53.83/bbl. The May contract was down 15¢ to $54.28/bbl.
The natural gas price for April settled at a rounded $2.80/MMbtu, up 2¢. The cash gas price at the Henry Hub in Cushing, Okla., closed at $2.51/MMbtu, down 9¢.
Heating oil for April declined 1.6¢ to a rounded $1.62/gal. Reformulated gasoline stock for oxygenate blending for April fell 5¢ to a rounded $1.68/gal.
The Brent crude contract for May on London’s ICE was down 15¢ to $56.36/bbl. The Brent June contract declined 18¢ to $56.66/bbl. Gas oil closed at $496.75/tonne, up $7.50.
The average price for OPEC’s basket of benchmark crudes on Mar. 1 was $53.82/bbl, up 42¢.
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.