MARKET WATCH: Oil prices rise on reassuring comments from Saudi Arabia

The light, sweet crude oil price for February broke through the $50/bbl mark on Jan. 9, settling above $52/bbl on the New York market while the Brent crude oil price for March moved above $61/bbl. This eighth straight day of increases is attributed, in part, to comments about crude output reduction made by Saudi Energy Minister Khalid al-Falih.

The light, sweet crude oil price for February broke through the $50/bbl mark on Jan. 9, settling above $52/bbl on the New York market while the Brent crude oil price for March moved above $61/bbl. This eighth straight day of increases is attributed, in part, to comments about crude output reduction made by Saudi Energy Minister Khalid al-Falih.

Al-Falih’s comments Jan. 9 included a reassurance that the kingdom is on track to reduce output to 10.2 million b/d this month. Al-Falih said Saudi Arabia would reduce its January oil exports by 800,000 b/d to 7.2 million b/d and would export 7.1 million b/d in February. The kingdom exported 8 million b/d in November 2018.

“We are serious about restoring balance to the market,” Al-Falih said at a press conference in Riyadh, adding, “We are concerned about volatility in the oil market. We have seen peaks and drops in prices [that are] completely unjustified by the fundamentals.”

Energy prices

The February light, sweet crude contract on the New York Mercantile Exchange gained $2.58 to settle at $52.36/bbl on Jan. 9 while the contract for March delivery settled at $52.69/bbl, up $2.58.

NYMEX natural gas for February was up nearly 2¢ to close at $2.98/MMbtu on Jan. 9.

Ultralow-sulfur diesel for February was up 5¢ to a rounded $1.88/gal. The NYMEX reformulated gasoline blendstock for February was up 6¢ to a rounded $1.43/gal.

Brent crude for March gained $2.72 to $61.44/bbl on London’s International Commodity Exchange while the April contract gained $2.71 to settle at $61.60/bbl. The gas oil contract was $561/tonne on Jan. 9, up $14.50.

The average price for the Organization of Petroleum Exporting Countries’ basket of crudes was $58.24/bbl on Jan. 9, up $2.13.

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