MARKET WATCH: NYMEX drops under $60/bbl, Brent under $65/bbl
Light, sweet crude prices dropped more than $3/bbl on the New York market and Brent dropped by more than $4/bbl in London Sept. 17 after Saudi Arabia said it has already restored some crude oil production that was lost to attacks on a processing complex and an oil field.
Saudi Energy Minister Prince Abdulaziz bin Salman told reporters during a news conference that Abqaiq processing plant has restored 2 million b/d of production. He said oil production will reach 11 million b/d by the end of September. Saudi Arabia will restore its full capacity of 12 million b/d by Oct. 31, he said.
Houthi rebels in Yemen have claimed responsibility for the Sept. 14 attacks on a crude oil and NGL processing complex at Abqaiq, which handles 7 million b/d, and at Khurais oil field, which produces 1.5 million b/d (OGJ Online, Sept. 16, 2019).
US President Donald Trump is investigating whether Iran might have been involved.
IHS Markit issued a note saying a limited impact in terms of time—7-14 days—would be manageable through any combination of Saudi stocks and world commercial inventories. An extended but manageable scenario—30-120 days—is most likely, analysts said on Sept. 17 before the Saudi news conference.
“Saudi Arabia is able to manage a partial return from the peak disruption of 5.7 million b/d, but it is unable to address the full extent of the damage on key facilities for as long as 4 months,” IHS Markit said. Such a disruption could trigger a coordinated release of world oil storage.
Energy prices
Light, sweet crude oil prices on the New York Mercantile Exchange for October delivery fell $3.56 to $59.34/bbl on Sept. 17 while the November contract declined $3.57 to $59.10/bbl.
The October gas price decreased 1¢ to settle at $2.67/MMbtu on Sept. 17.
Ultralow-sulfur diesel for October fell 9¢ to a rounded $1.99/gal. The NYMEX reformulated gasoline blendstock for October dropped nearly 8¢ to a rounded $1.67/gal.
Brent crude for November fell $4.47 to $64.55/bbl. The December contract decreased $4.12 to settle at $63.56/bbl.
Gas oil for October dropped $17.25 to $620/tonne on Sept. 17.
The average for the Organization of Petroleum Exporting Countries’ basket of crudes for Sept. 17 was $67.89/bbl, up $1.46.
Contact Paula Dittrick at [email protected].
Paula Dittrick | Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.
