MARKET WATCH: Crude oil prices briefly dip to 5-year lows

Oil prices on the New York and London markets remained volatile, briefly trading around lows not seen since 2009 although prices were attempting to rebound in early Dec. 9 trading.

Iraq cut the price of its January flagship Bashrah Light oil for Asian and US delivery Dec. 8 while it increased the price for European deliveries. The move was similar to what Saudi Arabia had already done.

KBC Energy Economics told Dow Jones that surplus West African crude is one indicator of demand, and unsold cargos have helped push Brent crude oil prices down.

In Nigeria, less than a third of January's cargoes have been sold with 2 weeks left before February barrels become available, KBC Energy said.

During Dec. 9 trading, US light, sweet crude oil prices touched a low of $62.25/bbl, the lowest since June 2009, and Brent crude oil dipped to $65.93/bbl, the lowest since October 2009. The prices for both US light, sweet crude and Brent appeared to be rising again before closing.

The US Energy Information Administration was scheduled to release its monthly oil report on Dec. 9 and its weekly petroleum inventory report on Dec. 10.

Energy prices

The New York Mercantile Exchange January crude oil contract fell $2.79 on Dec. 8, closing at $63.05/bbl. The February contract dropped $2.75 to $63.21/bbl.

The natural gas contract for January settled down 20.7¢ to a rounded $3.595/MMbtu. The cash gas price at Henry Hub, La., was $3.49 on Dec. 8, up 6¢.

Natural gas futures have fallen 20% from the season’s high settlement on Nov. 20. Traders said warm temperatures are forecast until Christmas, limiting the demand for heating.

Heating oil for January delivery fell 5.2¢ to a rounded $2.05/gal. Reformulated gasoline stock for oxygenate blending for January was down nearly 7¢ to a rounded $1.70/gal.

The January 2015 ICE contract for Brent crude oil dropped $2.88 to $66.19/bbl. The February contract fell $2.85 to $66.64/bbl. The ICE gas oil contract for December dropped $17, settling at $601.50/tonne.

The average price for OPEC’s basket of 12 benchmark crudes on Dec. 8 was $63.78/bbl, down $1.54.

Contact Paula Dittrick at paulad@ogjonline.com.

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