MARKET WATCH: NYMEX front-month crude hovers below $49/bbl on higher rig count
Light, sweet crude oil prices for April delivery gained slightly on the New York market Mar. 17 to remain under $49/bbl while oil prices dropped in early Mar. 20 trading following a higher weekly rig count total.
The US drilling rig count jumped 21 units to 789 for the week ended Mar. 17, said Baker Hughes Inc. The rig count has risen in 9 consecutive weeks (OGJ Online, Mar. 17, 2017).
Analysts and traders watch the rig count for a sign of future US oil production. Meanwhile, the Organization of Petroleum Exporting Countries and other major producer are cutting production to support oil prices.
Bjarne Schieldrop, chief commodities analyst at SEB Markets, told the Wall Street Journal that SEB Markets forecasts US oil production at 10.7 million b/d in 2018. The US Energy Information Administration revised its production forecast up to 9.2 million b/d in 2017 and 9.7 million b/d in 2018.
Last week, oil prices snapped a losing streak on Mar. 15 because the dollar’s value dropped when the Federal Reserve announced a decision to raise interest rates as expected. Oil is traded in dollars so a weaker dollar makes oil less expensive for buyers using other currencies.
Energy prices
The crude oil contract for April delivery on the New York Mercantile Exchange gained 3¢ on Mar. 17 to $48.78/bbl. The May contract climbed by 7¢ to $49.31/bbl.
The natural gas price for April rose 4.6¢ to a rounded $2.95/MMbtu. The Henry Hub cash gas price closed at $2.82/MMbtu, down 3¢.
Heating oil for April rose by less than 1¢ to a rounded $1.51/gal. Reformulated gasoline stock for oxygenate blending for April also gained nearly a penny to a rounded $1.60/gal.
The Brent crude contract for May on London’s ICE increased 2¢ to $51.76/bbl. The June contract gained 5¢ to $51.95/bbl. The gas oil contract settled at $456.75/tonne on Mar. 17, down $1.75.
The average price for OPEC’s basket of benchmark crudes on Mar. 17 was $49.36/bbl, down 34¢.
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.