MARKET WATCH: NYMEX crude oil approaches $50/bbl

The light, sweet crude oil price approached $50/bbl on the New York market July 28 while the Brent crude oil price settled above $52/bbl on the London market. Both benchmarks have gained in 12 of the past 15 trading sessions.

US crude for October delivery settled July 28 at $49.81/bbl, its closest closing to $50/bbl in almost 2 months. For the week, front-month US crude futures gained 8.6% while Brent gained 9.3%.

Both benchmarks posted their biggest weekly gains since the week ended Dec. 2, 2016, when the Organization of Petroleum Exporting Countries and some non-OPEC countries, including Russia, announced production-cut targets of about 1.8 million b/d.

Those targets started in January and later were extended through first-quarter 2018. Some analysts had expected the production-cut targets would boost oil prices to about $60/bbl by now, but prices slumped somewhat starting in March on lingering world crude oversupply concerns.

Rising US rig counts and increased US oil production have counterbalanced OPEC’s efforts to support prices. Recently, US rig tallies have wavered between gains and losses.

Baker Hughes’ US rig count for the week ended July 28 increased by 8 to 958, marking the second rise of the past 5 weeks for the overall count (OGJ Online, July 28, 2017).

Energy prices

The September light, sweet crude contract on the New York Mercantile Exchange gained 67¢ on July 28 to settle at $49.71/bbl. The October contract added 64¢ to close at $49.81/bbl.

The NYMEX natural gas price for September declined by nearly 3¢ to a rounded $2.94/MMbtu. The Henry Hub cash gas price held steady at $2.92/MMbtu.

Heating oil for August gained nearly 4¢ to a rounded $1.64/gal. Reformulated gasoline stock for oxygenate blending for August rose 3¢ to a rounded $1.68/gal.

The Brent crude contract for September on London’s ICE gained $1.03 to $52.52/bbl. The October contract was up 70¢ to $52.22/bbl.

The August gas oil contract gained $9.75 to $485.00/tonne. OPEC’s basket of crudes on July 28 was $49.46/bbl, up 58¢.

Contact Paula Dittrick at paulad@ogjonline.com.