MARKET WATCH: Oil benchmarks rise while OPEC meets

Crude oil prices rose July 1 while leaders of the Organization of Petroleum Exporting Countries decided to extend current crude production levels for another 9 months. OPEC is meeting with its non-OPEC allies, including Russia, on July 2.

Analysts said OPEC and its partners are concerned about weaker oil demand well going into 2020. Previously, OPEC cut oil production by 1.2 million b/d to support prices.

Russian President Vladimir Putin told reporters that he already reached an agreement with Saudi Crown Prince Mohammad bin Salman to extend the current crude oil production cuts when they met at the G20 conference in Osaka, Japan.

“This announcement highlights the power and influence of Russia over the OPEC decisions and politics,” said Sara Vakhshouri, president of SVB Energy International in Washington, DC. “It also a reminder of Russia’s strong alliance with Saudi Arabia that transforms the traditional role and functionality of OPEC and its members in balancing the oil market.”

Energy prices

Light, sweet crude oil on the New York Mercantile Exchange for August delivery gained 62¢ to $59.09/bbl on July 1 while the September contract increased 62¢ to $59.14/bbl.

NYMEX natural gas for August fell 4¢ to a rounded $2.26/MMbtu.

Ultralow-sulfur diesel for August gained 1¢ to $1.95/gal. The NYMEX reformulated gasoline blendstock for July increased 3¢ to a rounded $1.93/gal.

Brent crude for August held unchanged at $66.55/bbl. The September price increased 32¢ to settle at $65.06/bbl.

The gas oil contract for July declined $4.50 to $590.50/tonne on July 1.

The average for OPEC’s basket of crudes was $65.71/bbl on July 1, up 11¢.

Contact Paula Dittrick at pdittrick@endeavorb2b.com.