MARKET WATCH: Brent crude oil drops slightly

Brent crude oil for March delivery settled below $49/bbl on the London market Jan. 19 while there was no official settle for US light, sweet crude oil prices because the market in New York was closed in observance of Martin Luther King Jr. Day in the US.

Brent crude oil for March delivery settled below $49/bbl on the London market Jan. 19 while there was no official settle for US light, sweet crude oil prices because the market in New York was closed in observance of Martin Luther King Jr. Day in the US.

J.P. Morgan cut its average 2015 Brent forecast to $49/bbl from $82/bbl, saying its analysts believe oil prices could dip to average $38/bbl in March.

“We see significant oil oversupply with risk that Brent falls below $40/bbl in the near term should the oil market not be able to accommodate the surplus,” oil supply worldwide, J.P. Morgan said.

UAE Oil Minister Suhail Mohamed Faraj Al Mazrouei said Jan. 19 that low crude oil prices are unlikely to stay at current levels for long.

“I doubt it is going to last for very long because I’m a believer in sustainable development in the oil sector, and that sustainable development cannot be achieved at the current prices,” Mazrouei said.

The March ICE contract for Brent crude oil dropped $1.33 on Jan. 19 to settle at $48.84/bbl. ICE gas oil for February settled at $474/tonne, up $1.75 from Jan. 16.

The average price for OPEC’s basket of 12 benchmark crudes on Jan. 19 was $43.87/bbl, up 47¢ from Jan. 16.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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