MARKET WATCH: NYMEX, Brent crude oil prices drop more than $1/bbl
Crude oil prices fell more than $1/bbl on the New York and London markets on May 31 but regained some ground in June 1 trading pending release of a weekly government report on US oil and product inventories.
The American Petroleum Institute estimated US crude inventories fell 8.7 million bbl for the week ended May 26. The US Energy Information Administration was scheduled to release its inventory on June 1. Both API and EIA reports came out a day later than normal because of the May 29 Memorial Day holiday.
Goldman Sachs revised its oil price forecast downward for 2017, citing a possible rise in shale gas production, new projects, and the actions of the Organization of Petroleum Exporting Countries.
The investment bank now expects a 2017 average of $55.39/bbl Brent compared with its previous estimate of $56.76/bbl. Goldman Sachs lowered its forecast for US light, sweet crude oil prices to average $52.92/bbl, down from its earlier forecast of $54.80/bbl.
“We believe we are in a lower-for-longer environment until there is greater evidence shale deliverability is surprising to the downside or OPEC runs out of spare capacity,” Goldman Sachs analysts said in a research note earlier this week.
Energy prices
The July light, sweet crude contract on the New York Mercantile Exchange fell $1.34 to $48.32/bbl on May 31. The August contract fell $1.35 to close at $48.56/bbl.
The natural gas price for July dropped 7¢ to a rounded $3.07/MMbtu. The Henry Hub cash gas price was $3/MMbtu on May 31, down 5¢.
Heating oil for June dropped 3¢ to a rounded $1.51/gal. Reformulated gasoline stock for oxygenate blending for June fell 2.7¢ to $1.61/gal.
The Brent crude contract for July on London’s ICE dropped $1.53 to $50.31/bbl on May 31. The August contract fell $1.48 to $50.76/bbl. The June gas oil contract was $445.50/tonne on May 31, down $11.50.
OPEC’s basket of crudes on May 31 settled at $48.69/bbl, down 70¢.
Contact Paula Dittrick at [email protected].
Paula Dittrick | Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.
