MARKET WATCH: Benchmarks drop more than $2/bbl on demand concerns
Crude oil benchmark prices declined July 2 on markets in New York and London, more than erasing earlier gains after OPEC and its non-OPEC allies agreed July 2 to extend current crude production levels for another 9 months.
Crude oil benchmark prices declined July 2 on markets in New York and London, more than erasing earlier gains after the Organization of Petroleum Exporting Countries and its non-OPEC allies agreed July 2 to extend current crude production levels for another 9 months.
Both crude benchmarks marked the lowest finish for a front-month contract since June 19, Dow Jones Market Data showed.
Analysts attributed slumping oil prices to investors’ concerns about oil demand given ongoing US-China trade negotiations and indicators of a possibly deteriorating world economy. Reports showed manufacturing activity slowed across much of Europe, Asia, and the US in June.
OPEC on July 1 reached a deal to extend production cuts until March 2020. The alliance between OPEC and non-OPEC partners, including Russia, agreed to the same on July 2. The alliance of major producers has reduced oil production since 2017.
Speaking to CNBC in Vienna, Russian Energy Minister Alexander Novak said the agreement was about preventing major volatility and preserving an “albeit unsteady situation.”
Novak told CNBC, “I think it is right not to make any sudden movements now and maintain the situation as it is. What is important is that we have agreed to monitor the situation. If there are any drastic deviations, then we can swiftly get together and decide on what to do.”
Light, sweet crude oil on the New York Mercantile Exchange for August delivery fell $2.84 to $56.25/bbl on July 2 while the September contract decreased $2.80 to $56.34/bbl.
NYMEX natural gas for August fell nearly 3¢ to a rounded $2.24/MMbtu.
Ultralow-sulfur diesel for August dropped nearly 7¢ to $1.88/gal. The NYMEX reformulated gasoline blendstock for July decreased 6¢ to a rounded $1.87/gal.
Brent crude for September dropped $2.66 to $62.40/bbl. The October price decreased $2.60 to settle at $62.16/bbl.
The gas oil contract for July declined $13 to $577.50/tonne on July 2.
The average for OPEC’s basket of crudes was $63.95/bbl on July 2, up $1.76.
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