The light, sweet crude oil contracts dropped to settle under $52/bbl on the New York market on Oct. 19. The US benchmark fell for a second consecutive day in early trading on Oct. 20 during a week in which oil prices wavered between gains and losses.
Analysts said international politics contributed to mixed energy trading. Crude prices climbed earlier in the week after clashes between Iraqi government troops and Iraq’s Kurdish region forces disrupted some oil production and exports.
In September, Kurds voted nearly unanimously for independence from Iraq. Iraq’s central government and nearby countries oppose the independence referendum.
ING Group analysts reported that oil supplies flowing from Kurdistan through Turkey fell to around 196,000 b/d as of Oct. 19 compared with the usual 600,000 b/d.
“A prolonged disruption to this supply could tighten the oil market in Europe,” ING analysts said.
Chevron Corp. told the Wall Street Journal that it temporarily halted drilling in the Kurdish region because of fighting in nearby Kirkuk.
Chevron also said it has had trouble getting work crews into the area because of a flight ban to Iraqi Kurdistan imposed by Iran, Turkey, and the Iraqi central government in Baghdad, the WSJ reported.
Energy prices
The November light, sweet crude contract on the New York Mercantile Exchange fell 75¢ to $51.29/bbl on Oct. 19. The December contract was down 75¢ to $51.51/bbl.
The NYMEX natural gas price for November rose about 2¢ to a rounded $2.87/MMbtu. The Henry Hub cash gas price held unchanged at $2.81/MMbtu.
Heating oil for November dropped 2.6¢ to a rounded $1.78/gal. The NYMEX reformulated gasoline blendstock for November edged up less than a penny to remain at a rounded $1.64/gal.
The Brent crude contract for December on London’s ICE dropped 92¢ to $57.23/bbl. The January contract was down 82¢ to $56.98/bbl. The gas oil contract for November was $528.25/tonne, down $4.75.
The Organization of Petroleum Exporting Countries’ basket of crudes for Oct. 19 was $55.52/bbl, down 60¢.
Contact Paula Dittrick at [email protected].