MARKET WATCH: Crude oil prices fall on world oversupply concerns

The light, sweet crude oil contract for May delivery fell slightly on the New York market Apr. 3 to settle above $50/bbl while the Brent contract for June also fell modestly in London to settle above $53/bbl. Analysts cited concerns about lingering world crude oversupply.

The light, sweet crude oil contract for May delivery fell slightly on the New York market Apr. 3 to settle above $50/bbl while the Brent contract for June also fell modestly in London to settle above $53/bbl. Analysts cited concerns about lingering world crude oversupply.

“Crude oil is stalling,” said Petromatrix managing director Olivier Jakob in Zug, Switzerland. “It’s having difficulties to continue higher.”

Libya resumed production in Sharara field after it was shut in for a week because militia blocked access to a pipeline from the field to an export terminal. Libya’s production dropped 220,000 b/d during the temporary supply disruption (OGJ Online, Apr. 3, 2017).

Separately, Qatar is ending a moratorium on exploration and development of a massive natural gas field, Qatar Petroleum said Apr. 3, referring to a self-imposed pause in what Qatar calls North field. Qatar shares the field with Iran, which calls it South Pars.

Qatar declared a moratorium in 2005 on North field, saying it needed time to study the reservoir. Nearly all of Qatar’s existing gas production comes from the field.

“We have completed most of our projects and now is a good time to lift the moratorium,” QP Chief Executive Officer Saad al-Kaabi told reporters in Doha.

Elsewhere, China officials forecast Chinese oil production will fall 7% by 2020 from 2015 levels, citing aging fields.

Energy prices

The crude oil contract for May delivery on the New York Mercantile Exchange dropped 36¢ on Apr. 3 to close at $50.24/bbl. The June contract also declined 36¢ to $50.71/bbl.

The natural gas price for May dropped 6¢ to a rounded $3.13/MMbtu. The Henry Hub cash gas price closed Apr. 3 at $3.05/MMbtu, down 5¢.

Heating oil for May was down 1¢ to $1.56/gal. Reformulated gasoline stock for oxygenate blending for May fell nearly 1¢ to $1.69/gal.

The Brent crude contract for June on London’s ICE dropped 41¢ to $53.12/bbl, but the July contract was down by 38¢ to $53.41/bbl. The gas oil contract settled at $470.50/tonne on Apr. 3, up $1.

The average price for OPEC’s basket of benchmark crudes on Apr. 3 was $50.68/bbl, down 25¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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