Light, sweet oil prices for September and October plunged more than $4, settling under $55/bbl on the New York market after US President Donald Trump announced new tariffs on Chinese imports.
Brent crude for October delivery also fell more than $4 on the London market Aug. 1, settling at $60.50/bbl although the September contract held unchanged.
Trump said tariffs of 10% would be applied on an additional $300 billion of Chinese goods and products starting Sept. 1.
Light, sweet prices had been rangebound at $55-60/bbl during recent weeks despite attacks to oil tankers in the Strait of Hormuz. Analysts said concerns about US-China trade relations and associated effects on world oil demand outweighed worries about possible oil-shipment disruptions in the Middle East. Higher tariffs likely will hinder Chinese oil demand.
Reuters reported its monthly survey showed additional oil production cuts by Saudi Arabia. That in combination with Iran’s lower production and outages in Libya and Venezuela sent the Organization of Petroleum Exporting Countries’ production in July to its lowest level since 2011.
In July, OPEC’s 14 members produced 29.42 million b/d, a decline of 280,000 b/d compared with June, the Reuters survey said.
Saudi production was 9.65 million b/d in July, Reuters said. The production decline came after OPEC and other major producers, including Russia, extended existing production-cut targets into 2020.
Energy prices
Light, sweet crude oil on the New York Mercantile Exchange for September delivery tumbled $4.63 to settle at $54.49/bbl on Aug. 1 while the October contract dropped $4.62 to $54.54/bbl.
The NYMEX natural gas price for September decreased 3¢ to $2.20/MMbtu.
Ultralow-sulfur diesel for September fell nearly 12¢ to $1.85/gal. The NYMEX reformulated gasoline blendstock for September dropped nearly 12¢ to a rounded $1.75/gal.
Brent crude for September held unchanged at $64.72/bbl. The October contract tumbled $4.55 to settle at $60.50/bbl.
Gas oil for August declined $15.50 to $586.25/tonne on Aug. 1.
The average for OPEC’s basket of crudes was $63.54/bbl on Aug. 1, down $1.99.
Contact Paula Dittrick at [email protected].
