Light, sweet crude oil prices settled modestly higher on the New York market at just above $53.80/bbl Feb. 3 after touching a trading-session high of $56.18/bbl. Brent crude closed on the London market above $56.80/bbl after touching above $59/bbl on Feb. 3.
Ole Hansen, Saxo Bank head of commodity strategy, said oil prices were supported by confidence that the Organization of Petroleum Exporting Countries was complying with its vows to cut production and by a weakening US dollar.
Oil futures for light, sweet crude have largely traded at $50-55/bbl since OPEC and other major producers started cutting production Jan. 1. OPEC is scheduled to release its statistics for January production on Feb. 13.
Hansen said cuts by major producers outweighed the risk of increased US and Libyan production.
“In addition, we are now seeing the return of a geopolitical risk premium as concerns have risen that new US sanctions against Iran could be extended,” Hansen said.
US President Donald J. Trump’s administration imposed economic sanctions on Feb. 3 against 25 Iranian companies and individuals, warning Iran that it was “playing with fire” by testing missiles. Iran responded with military drills during the weekend.
Analysts called the latest US sanctions largely symbolic because the measures were directed at businesses and individuals unlikely to have US assets or business dealings.
Energy prices
The NYMEX crude oil contract for March delivery gained 29¢ on Feb. 3 to $53.83/bbl. The April contract was up 30¢ to $54.47/bbl.
US natural gas futures for March delivery dropped 12¢ to a rounded $3.06/MMbtu. Gas spot prices at the Henry Hub in Cushing, Okla., dropped 10¢ to $3/MMbtu.
Heating oil for March rose 1¢ to a rounded $1.66/gal. Reformulated gasoline stock for oxygenate blending for March gained 2¢ to a rounded $1.55/gal.
The Brent crude contract for April on London’s ICE increased 25¢ to $56.81/bbl. The Brent May contract was up 30¢ to $57.15/bbl. Gas oil for February closed at $497/tonne, down $3.75.
The average price for OPEC’s basket of benchmark crudes on Feb. 3 was $55.24/bbl, up 31¢.
Contact Paula Dittrick at [email protected].
