MARKET WATCH: NYMEX, Brent oil prices rise slightly in thin holiday trading

Oil prices rose slightly on May 29 in thin trading volumes because of the Memorial Day holiday in the US as well as UK and China holidays. Both benchmark crude oil prices in New York and London dropped on May 30 as typical trading resumed. Oil continued falling in early May 31 trading.

Oil prices rose slightly on May 29 in thin trading volumes because of the Memorial Day holiday in the US as well as UK and China holidays. Both benchmark crude oil prices in New York and London dropped on May 30 as typical trading resumed. Oil continued falling in early May 31 trading.

Analysts and traders remain uncertain about short-term oil prices given an extension of production-cut targets by the Organization of Petroleum Exporting Countries and some non-OPEC producers.

An alliance of OPEC and non-OPEC producers pledged May 26 to extend production cuts of about 1.8 million b/d through first-quarter 2018. An initial alliance agreement, effective Jan. 1, was scheduled to expire in June.

One analyst notes Saudi Arabia oil officials talk about reducing world inventories of oil supplies yet OPEC’s official statement on the extension of the production-cut targets only mentioned, “the importance of continuing efforts to help stabilize the oil market.”

Olivier Jakob from Petromatrix said, “That shows there is somehow less commitment from all OPEC members to target a rebalancing of the stocks to the 5-year average.” He suggests that certain OPEC members do not want to commit themselves to a policy that sets targets for stock levels.

James L. Williams, WTRG Economics energy economist, said oil prices have experienced “a little bit of a bounce back from last Thursday when we had a really heavy drop.” He doubts 9 additional months of current production levels will be enough to meet OPEC’s goal of balancing supply.

Meanwhile, US crude oil production is up since June 2016. US output of more than 9.3 million b/d. The week inventory report will be released June 1 because of the May 29 Memorial Day holiday.

Baker Hughes Inc. reported the US oil rig count at 722 for the week ended May 19—the highest since April 2015.

Energy prices

The July light, sweet crude contract on the New York Mercantile Exchange dropped 14¢ to $49.66/bbl on May 30 to close at $49.66/bbl. The August contract also fell 14¢ to close at $49.91/bbl.

The natural gas price for July dropped a rounded 2¢ to a rounded $3.15/MMbtu. The Henry Hub cash gas price was $3.05/MMbtu on May 30, which was down 6¢ from the May 26 closing.

Heating oil for June dropped 1.4¢ to a rounded $1.54/gal. Reformulated gasoline stock for oxygenate blending for June fell less than a penny to remain at a rounded $1.64/gal.

The Brent crude contract for July on London’s ICE dropped 45¢ to $51.84/bbl on May 30. The August contract fell 40¢ to $52.24/bbl. The June gas oil contract was $457/tonne on May 30, down $4.25.

OPEC’s basket of crudes on May 30 settled at $49.67/bbl, up 19¢. The basket was $49.30/bbl on May 31, down 37¢.

Contact Paula Dittrick at paulad@ogjonline.com.

More in General Interest