MARKET WATCH: Crude oil falls on New York, London markets

Oil futures prices dropped on the New York market during Nov. 18 trading, which analysts attributed to renewed concerns that the Federal Reserve might begin to taper its economic-stimulus program soon based upon comments made during a speech by a Fed spokesman.
Nov. 19, 2013
2 min read

Oil futures prices dropped on the New York market during Nov. 18 trading, which analysts attributed to renewed concerns that the Federal Reserve might begin to taper its economic-stimulus program soon based upon comments made during a speech by a Fed spokesman.

William Dudley, president of the Federal Reserve Bank of New York, said he was becoming more optimistic about the US economy.

“I have to admit that I am getting more hopeful,” Dudley said during a speech to Queens College in New York. Dudley suggested no timetable, saying only that the Fed will begin to reduce its $85 billion/month bond-buying program when the time is right.

Analysts took his comment as an indication that the timing might be soon although the Fed has been discussing this anticipated measure for months without taking action. The stimulus helps support oil prices by weakening the dollar, making crude oil less expensive to buy using other currencies.

On the London market, Brent crude for January delivery also declined slightly pending the scheduled resumption of international negotiations on Iran’s nuclear program. Representatives of Iran, five permanent members of the UN Security Council, and Germany, plan to meet on Nov. 20.

A potential agreement to restrict Iran’s nuclear program could result in the easing of some international economic sanctions on Tehran, including oil exports.

Energy prices

The New York Mercantile Exchange December crude contract declined 81¢ on Nov. 18 to settle at $93.08/bbl. The January 2014 contract also dropped 81¢, settling at $93.68/bbl.

Heating oil for December delivery was down a rounded 1.7¢ to settle at $2.92/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for December delivery edged down by less than a penny to remain at a rounded $2.66/gal.

The December natural gas contract on NYMEX dropped 4.3¢ to settle at a rounded $3.62/MMbtu. On the US spot market, the gas price at Henry Hub, La., was a rounded $3.69/MMbtu, a 12.4¢ increase.

In London, the January ICE contract for Brent crude oil declined by 3¢, settling at $108.47/bbl. The December contract for ICE gas oil dropped by $1 to $910.25/tonne.

The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $105.04/bbl on Nov. 18, down 20¢ from Nov. 15 trading.

Contact Paula Dittrick at [email protected].

About the Author

Paula Dittrick

Senior Staff Writer

Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.

Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.

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