Oil prices fell on the New York and London markets on June 4 but were moving back up again June 5 in early trading after the Organization of Petroleum Exporting Countries agreed to maintain its 30 million b/d production quota, which most market participants had expected.
“The ceiling is the same,” Saudi Arabia’s Oil Minister Ali al-Naimi told reporters in Vienna after the meeting. “You will be surprised how amicable the meeting was.”
The June 5 OPEC decision to maintain the production quota was the same as the cartel made at its meeting in November 2014. The 30 million b/d target has been in place for more than 3 years, and it’s widely accepted that OPEC actually is producing above that level.
“OPEC’s summit in Vienna has shifted attention away from the latest swing in the US dollar or the decline in US crude-oil inventories and back onto the larger, global supply-demand balance,” Citi Futures analyst Tim Evans wrote in a research note.
The natural gas contract for July dropped less than a penny to remain at a rounded $2.63/MMbtu. The Henry Hub, La., gas price declined 5¢ to $2.59/MMbtu.
Heating oil for July was down 4.8¢ to a rounded $1.84/gal. The price for reformulated gasoline stock for oxygenates blending for July declined by 6.5¢ to a rounded $1.98/gal.
The July ICE contract for Brent crude declined $1.77 to $62.03/bbl while the August contract fell $1.85 to $62.69/bbl. The ICE gas oil contract for June was down $18.50 to $567/tonne.
The average price for OPEC’s basket of 12 benchmark crudes for June 4 was $59.67/bbl, down $1.88.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.