MARKET WATCH: NYMEX oil prices dip to lowest level since 2016
US light, sweet crude oil prices lost about $1.70/bbl on the New York market, dipping to the lowest levels since November 2016 following release of a monthly Oil Market Report from the International Energy Agency indicating ample world oil supplies linger despite production cuts by some.
US light, sweet crude oil prices lost about $1.70/bbl on the New York market, dipping to the lowest levels since November 2016 following release of a monthly Oil Market Report from the International Energy Agency indicating ample world oil supplies linger despite production cuts by some (OGJ Online, June 14, 2017).
In May, the Organization of Petroleum Exporting Countries and some non-OPEC members, including Russia, extended existing production-cut targets of 1.8 million b/d through first-quarter 2018. The targets are set against October 2016 production levels.
“The market right now is fixated on whether…oil inventories are coming down,” said Harry Tchilinguirian, BNP Paribas head of commodity market strategy.
IEA expects US crude oil supply will rise 430,000 b/d throughout the year with 2017 ending with production 920,000 b/d higher than yearend 2016. The agency said US 2018 crude oil production will increase 780,000 b/d year-over-year.
IEA forecast non-OPEC production will increase 1.5 million b/d during 2018 while world demand will increase by 1.4 million b/d.
The US Energy Information Administration, meanwhile, reported commercial crude inventories, excluding the Strategic Petroleum Reserve, dropped 1.7 million bbl for week ended June 9 (OGJ Online, June 14, 2017).
At 511.5 million bbl, US crude inventories remain in the upper half of the average range for this time of year. Separately, the American Petroleum Institute estimated a 2.75-million bbl increase for the week ended June 9. EIA’s report is the more closely watched of the two estimates.
EIA’s Petroleum Status Report put US crude oil production at 9.3 million b/d for the week ended June 9, up 12,000 b/d. Alaska’s production fell by 13,000 b/d to 490,000 b/d while Lower 48 production increased by 25,000 b/d to 8.840 million b/d.
The July light, sweet crude contract on the New York Mercantile Exchange dropped $1.73 to $44.73/bbl on June 14. The August contract was down $1.74 to close at $44.93/bbl.
The NYMEX natural gas price for July declined 3¢ to a rounded $2.93/MMbtu. The Henry Hub cash gas price was $2.90/MMbtu, down 11¢.
Heating oil for July fell nearly 4¢ to $1.41/gal. Reformulated gasoline stock for oxygenate blending for July dropped 7¢ to a rounded $1.43/gal.
The Brent crude contract for August on London’s ICE fell $1.72 to $47/bbl on June 14. The September contract decreased $1.76 to $47.29/bbl. The July gas oil contract was $418.75/tonne on June 14, down $7.25.
OPEC’s basket of crudes on June 14 was not immediately available.
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