MARKET WATCH: NYMEX, Brent crude oil prices stay flat before OPEC meeting
Light, sweet crude oil dropped slightly but stayed fairly flat in May 24 trading on the New York Mercantile Exchange settling above $51.30/bbl pending a May 25 meeting of Petroleum Exporting Countries in Vienna.
The cartel and some non-OPEC members extended a production agreement to Apr. 1, 2018.
“The cut we have made last December is working,” said Saudi Energy Minister and OPEC Pres. Khalid al-Falih. “Nine months with the same level of production that our member countries have been producing at is a very safe and almost certain option to do the trick.”
The OPEC meeting was followed by a joint meeting of OPEC and non-OPEC producers, including Russia.
Al-Falih said the extension had the same terms as an agreement reached in late 2016. That agreement called for production to be reduced by 1.8 million b/d of which OPEC accounted for 1.2 million b/d. The intention was to reduce world oil inventories in support of higher oil prices.
The production-cut targets took effect Jan. 1 and generally kept the US benchmark in a range of $50-54/bbl for most of 2017 so far. But prices fell to a 5-month low in early May.
Prices returned to $50/bbl and higher as the OPEC meeting neared and also on reports that Russia and Saudi officials supported a 9-month extension.
US oil production rose for the week ended May 19 to 9.32 million b/d, up 15,000 b/d. Lower 48 production was up 20,000 b/d to 8.815 million b/d while Asla production dropped 5,000 b/d to 505,000 b/d, the US Energy Information Administration reported in the Weekly Petroleum Status Report.
EIA said US crude oil supplies declined for the fourth consecutive week for the week ended May 19 (OGJ Online, May 24, 2016). An estimated drop of 4.4 million bbl put the latest total at 516.3 million bbl.
Energy prices
The July light, sweet crude contract on NYMEX fell 11¢ on May 24 to close at $51.36/bbl. The August contract dropped 13¢ to settle at $51.59/bbl.
The natural gas price for June fell 1¢ to a rounded $3.21/MMbtu. The Henry Hub cash gas price was $3.11/MMbtu, down 9¢.
Heating oil for June edged down less than 1¢ to remain at a rounded $1.61/gal. Reformulated gasoline stock for oxygenate blending for June dropped nearly a penny to a rounded $1.65/gal.
The Brent crude contract for July on London’s ICE dropped 19¢ to $53.96/bbl. The August contract was down 17¢ to $54.24/bbl. The June gas oil contract was up $1.25 to $480.25/tonne.
OPEC’s basket of crudes on May 24 settled at $51.96/bbl, up 62¢.
Contact Paula Dittrick at [email protected].
About the Author
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.