US crude oil futures for August delivery settled below $60/bbl on the New York market June 25, and prices continued declining in early June 26 trading upon uncertainty about Greek economic bailout talks and the approaching deadline for an international agreement regarding Iran’s nuclear program.
Barclays Research analysts said in a Blue Drum note: “The [world oil] market appears to have been set on cruise control, but the road remains rife with hazards. A possible misalignment of Iran’s return, shale’s decline, Chinese stockbuilding, the end of the driving season, and refining turnarounds might lead to downward price pressure.”
Oil prices face downward pressure for the rest of 2015 on resilient oil supplies, Barclays said, adding it expects inventories will build through Dec. 31.
“We continue to expect Brent to average $61/bbl in the third quarter,” they said.
Regarding the US, Barclays said unconventional well productivity gains and higher completions could keep US output level through the third quarter. “In the medium term, a smaller US petroleum deficit should diminish the dollar’s impact on oil prices, in contrast to the high negative beta of the first half. A deal with Iran looks to be within reach and the prospect of additional oil appearing on the market is flattening the shape of the Brent curve,” analysts said.
The natural gas contract for July was up 9¢ to a rounded $2.85/MMbtu. The Henry Hub, La., gas price was up 2¢ to $2.79/MMbtu.
Heating oil for July dropped 1.4¢ to a rounded $1.86/gal. The price for reformulated gasoline stock for oxygenates blending for July was down a rounded 2¢ to a rounded $2.04/gal.
The August ICE contract for Brent crude was down 29¢ to $63.20/bbl while the September contract was down 40¢ to $63.76/bbl. The ICE gas oil contract for July was down $10.75 to $570.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for June 25 was $59.64/bbl, down $1.04¢.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.