MARKET WATCH: NYMEX oil price drops slightly on stronger dollar

The light, sweet crude oil futures contract for June delivery fell slightly as the dollar strengthened but front-month oil prices held above $59/bbl by settlement May 11 on the New York market.

The light, sweet crude oil futures contract for June delivery fell slightly as the dollar strengthened but front-month oil prices held above $59/bbl by settlement May 11 on the New York market.

The Wall Street Journal Dollar Index, which tracks the greenback against other major currencies, rose 0.3%. Oil is traded in dollars, and a stronger dollar makes oil more expensive for buyers using other currencies.

In a Drilling Productivity Report, the US Energy Information Administration said May 11 that it expects oil production in seven key shale regions to fall by 86,000 b/d during June compared with May.

Meanwhile, the Organization of Petroleum Exporting Countries reportedly has a recent strategy report in which the cartel said it does not see oil prices consistently trading at $100/bbl again in the next decade, WSJ reported, citing people familiar with the report.

The report forecast oil prices will be about $76/bbl in 2025 in OPEC’s most optimistic scenario, the people said. A price of “$100 is not in any” of the scenarios in the report, said a delegate at the OPEC strategy presentation last week in Vienna, WSJ said.

The June crude oil contract on the New York Mercantile Exchange settled on May 11 at $59.26/bbl, down 14¢. The July contract for NYMEX oil settled at $60.29/bbl, down 6¢.

The natural gas contract for June delivery declined 7.8¢ to a rounded $2.80/MMbtu. The Henry Hub, La., gas price was $2.85/MMbtu, up 8¢.

Heating oil for June delivery fell 0.8¢ to a rounded $1.94/gal on May 11. The price for reformulated gasoline stock for oxygenates blending for June decreased by less than a penny to remain at $1.99/gal.

The June ICE contract for Brent crude was down 48¢ to $64.91/bbl, while the July contract was down 54¢ to $65.62/bbl. The ICE gas oil contract for June was down $5.75 to $589.25/tonne.

The average price for the OPEC’s basket of 12 benchmark crudes for May 11 was $62.03/bbl, down 41¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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