MARKET WATCH: NYMEX, Brent crude prices climb on production outages

Light, sweet crude oil for May delivery settled above $53/bbl on Apr. 10 supported by production outages in Libya and Canada.

Libya’s Sharara field halted production after only a week of having reopened. Libya’s National Oil Corp. declared force majeure on exports, Bloomberg reported. Militia again blocked the pipeline to the export terminal. The shut in stopped 220,000 b/d of production.

“The Libyans are constantly shutting and reopening their fields because of political and technical issues,” Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass., told Bloomberg. “The talk of an extension, strength of the US economy, and ongoing minor supply problems like Libya are leading people to think the market will probably be getting tighter.”

Separately, analysts with Standard Chartered in London noted oil markets remain without 350,000 b/d of oil production from Canada’s oil sands. On Mar. 14, a fire damaged equipment at Mildred Lake, Alta.

Suncor Energy Inc. moved up a planned 8-week turnaround at the Syncrude Mildred Lake oil sands plant. Suncor expects to restart Mildred Lake production at about 175,000 b/d in mid-April and gradually ramp up to full 350,000-b/d capacity.

Elsewhere, Russia’s Energy Minister Alexander Novak said Apr. 7 that his ministry is talking with oil companies regarding the need to prolong the production-cut agreement with the Organization of Petroleum Exporting Countries.

OPEC has pledged to trim its production by 1.2 million b/d. The agreement exempted OPEC members Libya and Nigeria. Non-OPEC producer Russia agreed to trim its production by 300,000 b/d. OPEC plans to consider in May whether to extend the production-cut targets beyond 6 months. The cuts started in January.

Production from Buzzard field in the UK North Sea returned to full capacity on Apr. 8, Bloomberg said. The field was shut Apr. 2 following an unplanned outage. Nexen Inc., owned by CNOOC Ltd., operates Buzzard (OGJ Online, Apr. 5, 2017).

Energy prices

The crude oil contract for May delivery on the New York Mercantile Exchange gained 84¢ on Apr. 10 to close at $53.08/bbl. The June contract rose 84¢ to $53.48/bbl.

The natural gas price for May dropped 2¢ to a rounded $3.24/MMbtu. The Henry Hub cash gas price closed Apr. 10 at $3.15/MMbtu, down 5¢.

Heating oil for May was up nearly 2¢ to a rounded $1.65/gal. Reformulated gasoline stock for oxygenate blending for May rose 1¢ to a rounded $1.76/gal.

The Brent crude contract for June on London’s ICE gained 74¢ to $55.98/bbl. The July contract was up by 79¢ to $56.32/bbl. The gas oil contract for April settled at $493.50/tonne, up $5.75.

The average price for OPEC’s basket of benchmark crudes on Apr. 10 was $53.13/bbl, up 22¢.

Contact Paula Dittrick at paulad@ogjonline.com.