MARKET WATCH: NYMEX, Brent crude oil prices falling

Crude oil prices retreated toward $49/bbl Aug. 3 on the New York market in what has been a volatile week with prices wavering between gains and losses. Oil prices were falling in early Aug. 4 trading.
Aug. 4, 2017
3 min read

Crude oil prices retreated toward $49/bbl Aug. 3 on the New York market in what has been a volatile week with prices wavering between gains and losses. Oil prices were falling in early Aug. 4 trading.

Analysts said market participants awaited news from an Aug. 7-8 meeting in Abu Dhabi of technical experts representing the Organization of Petroleum Exporting Countries and some non-OPEC producers.

Member compliance with the production-cut targets is expected to be the main topic. Preliminary data show OPEC output rose in July. An OPEC monitoring committee reported 98% compliance with the production-cut targets during June.

"Although conformity with the production agreement remains strong at the aggregate level, some countries continue to lag, which is a concern we must address head on," Saudi Energy Minister Khalid al-Falih said at a monitoring committee meeting in St Petersburg, Russia, in July.

In November 2016, OPEC agreed to cut cartel oil production by 1.2 million b/d to 32.5 million b/d starting Jan. 1. On Dec. 10, 2016, OPEC finished a meeting with non-OPEC countries in Vienna, at which non-OPEC countries vowed to cut oil output by 558,000 b/d, with Russia saying it would cut its production by 300,000 b/d.

Those agreements have been extended into 2018. The goal was to diminish ample world oil inventories in support of oil prices. But US oil production continues to rise.

The Wall Street Journal reported its monthly survey of investment banks’ oil price expectations. At the end of July, 15 investment banks forecast that Brent will average $53/bbl for 2017, down $2 from the WSJ June survey. The banks expect US light, sweet crude oil will average $51/bbl this year, down $1 from the June survey.

Separately, Eugen Weinburg of Commerzbank noted Brent prices “failed yet again to increase towards and above $53/bbl, which may encourage some negative reactions.” Brent settled at $52.36/bbl on Aug. 2. Brent for October delivery had settled at $52.72/bbl during late July.

Baker Hughes was scheduled to release its weekly US oil rig data later Aug. 4.

Energy prices

The September light, sweet crude contract on the New York Mercantile Exchange declined by 56¢/bbl on Aug. 3 to settle at $49.03/bbl. The October contract fell by 54¢ to close at $49.19/bbl.

The NYMEX natural gas price for September dropped 1¢ to $2.80/MMbtu. The Henry Hub cash gas price rose 1¢ to $2.78/MMbtu.

Heating oil for September was down nearly 2¢ to a rounded $1.64/gal. Reformulated gasoline stock for oxygenate blending for September fell 1¢ to a rounded $1.63/gal.

The Brent crude contract for October on London’s ICE declined 35¢ to $52.01/bbl. The November contract was down 42¢ to $52.02/bbl.

The August gas oil contract rose $3 to $493/tonne. OPEC’s basket of crudes on Aug. 3 was $50.24/bbl, up 51¢.

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.

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