MARKET WATCH: Crude benchmarks gain more than $1/bbl

Crude oil benchmarks rose by more than $1/bbl in New York and London markets Sept 9 largely on news that Saudi Arabia had appointed Prince Abdulaziz bin Salman as its energy minister.

Crude oil benchmarks rose by more than $1/bbl in New York and London markets Sept 9 largely on news that Saudi Arabia had appointed Prince Abdulaziz bin Salman as its energy minister.

While speaking with reporters at the World Energy Congress (WEC) in Abu Dhabi, the new energy minister was careful not to give any indication or signal of what might happen in the Joint Ministerial Monitoring Committee (JMMC) meeting scheduled for Sept. 12 in Abu Dhabi.

The Organization of Petroleum Exporting Countries and other major producers (OPEC+) agreed in July to maintain oil-production cut targets of 1.2 million b/d into the first quarter of 2020.

Prince bin Salman said Saudi strategy in the upcoming JMMC meeting “depends on the market.”

Sara Vakshouri, president of SVB Energy International in Washington, DC, told OGJ, “This doesn’t suggest that the OPEC+ will or will not cut its production, but it indicates an important nuance about the leadership and vision of the new Saudi energy minister” who emphasized consensus building with OPEC.

Vakshouri notes this is a different approach that in the past when officials from Saudi Arabia and Russia would sometimes indicate a decision already had been made before the actual meeting. This led to the notion that decisions are made by a few countries, she said.

Also speaking at WEC, ADNOC Group Chief Executive Officer Sultan Ahmed Al Jaber described the long-term outlook for world energy demand as “robust.” He estimated $11 trillion of oil and gas investment is needed to keep up with forecast oil demand although he did not specify a time period for that investment.

Al Jaber, who is United Arab Emirates minister of state, also said ADNOC is on schedule to raise its oil production capacity to 4 million b/d by 2020 and to 5 million b/d by 2030.

Energy prices

Light, sweet crude oil on the New York Mercantile Exchange for October delivery increased $1.33 to $57.85/bbl on Sept. 9 while the November contract gained $1.30 to $57.73/bbl.

The October natural gas price on NYMEX increased nearly 9¢ to settle at a rounded $2.59/MMbtu on Sept. 9.

Ultralow-sulfur diesel for October increased by a rounded 3¢ to $1.93/gal. The NYMEX reformulated gasoline blendstock for October gained 1¢ to a rounded $1.58/gal.

Brent crude for November rose $1.05 to $62.59/bbl. The December contract increased $1.06 to settle at $61.63/bbl.

Gas oil for September rose $16.75 to $592.25/tonne on Sept. 9.

The average for OPEC’s basket of crudes for Sept. 9 was $62/bbl up $1.25.

Contact Paula Dittrick at pdittrick@endeavorb2b.com.

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