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

Light, sweet crude oil for October fell by $1.65 to settle under $56/bbl on Sept. 11 while Brent for November dropped nearly $1.60 to settle under $61/bbl.

Light, sweet crude oil for October fell by $1.65 to settle under $56/bbl on Sept. 11 while Brent for November dropped nearly $1.60 to settle under $61/bbl. US natural gas futures declined Sept. 11 after having gained overall in recent weeks.

Gas prices typically drop with the end of summer, which brings less demand for electricity for air conditioners. But US forecasts for a hot September have supported gas prices.

The October natural gas price on the New York Mercantile Exchange for October settled at $2.58/MMbtu on Sept. 10 compared with a 3-year gas low of $2.07/MMbtu on Aug. 5 (OGJ Online, Sept. 10, 2019).

“An extension of summer helps, but it’s not game changing like what we’re seeing going on in the market,” Jordan McNiven, analyst with Houston investment bank Tudor, Pickering, Holt & Co., told the Wall Street Journal.

Regarding oil prices, a market monitoring committee of the Organization of Petroleum Exporting Countries and other major projects met Sept. 12 in Abu Dhabi ahead of OPEC policy discussions in Vienna in December.

Reuters reported OPEC agreed Sept. 12 to reduce oil production by bringing Iraq’s and Nigeria’s production in line with their targets.

OPEC+ has overcomplied on average with its agreed cut of 1.2 million b/d while exports collapsed from Iran and Venezuela due to US sanctions. Meanwhile, Iraq and Nigeria produced above their targets.

Iraq, OPEC’s second-largest oil producer, pledged Sept. 12 to reduce output by 175,000 b/d by October, while Nigeria is to reduce supply by 57,000 b/d.

Saudi Arabia, will continue producing less than its target, said Prince Abdulaziz bin Salman, who took over as energy minister from Khalid al-Falih.

The kingdom will voluntarily produce below 10 million b/d, he said, adding the monitoring committee meeting also discussed all potential uncertainties regarding the oil market.

Any formal decision must wait until the next OPEC+ meeting in December.

Energy prices

Light, sweet crude oil on the NYMEX for October delivery decreased $1.65 to $55.75/bbl on Sept. 11 while the November contract fell $1.62 to $55.67/bbl.

The October gas price decreased nearly 3¢ to settle at $2.55/MMbtu on Sept. 11.

Ultralow-sulfur diesel for October decreased nearly 3¢ to $1.90/gal. The NYMEX reformulated gasoline blendstock for October fell 2¢ to a rounded $1.57/gal.

Brent crude for November fell $1.57 to $60.81/bbl. The December contract decreased $1.50 to settle at $59.95/bbl.

Gas oil for September fell $11.25 to $589.50/tonne on Sept. 11.

The average for OPEC’s basket of crudes for Sept. 11 was $62.08/bbl, down 66¢.

Contact Paula Dittrick at pdittrick@endeavorb2b.com.

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