MARKET WATCH: NYMEX crude oil prices drop on higher US oil supply

Light, sweet crude oil for November delivery fell on the New York market Sept. 25 after a US government inventory report on crude oil supplies showed a second consecutive increase, which added to oil investors’ concerns about excess supply.

The US Energy Information Administration said crude supplies, excluding the Strategic Petroleum Reserve, rose by 2.4 million bbl for the week ended Sept. 20 (OGJ Online, Sept. 25, 2019).

At 419.5 million bbl, US crude oil inventories are at the 5-year average for this time of year, the report indicated. EIA’s Petroleum Status Report also showed US oil production rose to 12.5 million b/d for the week ended Sept. 20, up 100,000 b/d from the week ended Sept. 13.

US natural gas futures prices fell for a seventh consecutive session, marking the longest losing streak since December 2015, said Dow Jones Market Data. Analysts attributed the gas price decline to concerns about softening demand given mild fall weather forecasts.

In a research note on the world’s economic outlook, Barclays analyst Ajay Rajadhyaksha in New York said, “US-China trade tensions could worsen again, as has repeatedly occurred, and tensions in the Middle East could reach boiling point after the attacks in Saudi Arabia.”

Barclays expects the 2020 world economy “to be a bit weaker” than it was in 2019.

“Still, our baseline call is for a slowdown and weaker growth, not an outright recession,” Rajadhyaksha said. “Services the world over are still expanding. Global labor markets are in decent shape, even if job growth has slowed, and consumption should continue to support the world economy.”

Energy prices

Light, sweet crude oil prices on the New York Mercantile Exchange for November decreased 80¢ to $56.66/bbl on Sept. 25 while the December contract fell 75¢ to $56.49/bbl.

The October natural gas price edged down by less than 1¢ to remain at $2.50/MMbtu on Sept. 25.

Ultralow-sulfur diesel for October dropped 1¢ to a rounded $1.95/gal. The NYMEX reformulated gasoline blendstock for October declined a rounded 3¢ to $1.62/gal.

Brent crude for November fell 71¢ to $62.39/bbl. The December contract decreased 69¢ to settle at $61.43/bbl.

Gas oil for October fell $9.50 to $596.50/tonne on Sept. 25. The average for the Organization of Petroleum Exporting Countries’ basket of crudes for Sept. 25 was $62.35/bbl, down $1.58.

Contact Paula Dittrick at [email protected].