Crude oil prices moved upward on New York and London markets Jan. 18 as the US and China continue trade negotiations and indications of a path to a supply-trade rebalancing emerge.
Discussions between the US and China continue. Late last week, Chinese Vice-Premier Liu He confirmed he will visit Washington, DC, Jan. 30-31 for continued trade negotiations. At the White House Jan. 19, US President Donald Trump told reporters that “things are going very well with China and with trade,” but said reports that US tariffs on Chinese products would be lifted were false.
“If we make a deal, certainly, we would not have sanctions, and if we don’t make a deal we will,” Trump said. “We’ve really had a very extraordinary number of meetings and a deal could very well happen with China. It’s going well. I would say about as well as it could possibly go.”
On the issue of supply and demand, the International Energy Agency said Jan. 18 that the journey to a balanced global oil market will take time and is more likely to be a marathon than a sprint (OGJ Online, Jan. 18, 2019). The agency’s first Oil Market Report of 2019 detailed its current global oil demand growth estimate for the year will remain unchanged at 1.4 million b/d. On the production side, a reassuring picture for those concerned about US shale production was painted by Schlumberger Chief Executive Paal Kibsgaard. In its fourth-quarter earnings report, Kibsgaard said the company expects US shale drilling to nudge downward this year as companies move to completion mode and focus on capital discipline.
Energy prices
The February light, sweet crude contract on the New York Mercantile Exchange gained $1.73 to settle at $53.80/bbl on Jan. 18 while the contract for March gained $1.68 to settle at $54.04/bbl.
NYMEX natural gas for February gained a rounded 7¢ to close at $3.48/MMbtu on Jan. 18.
Ultralow-sulfur diesel for February was up 3¢ to a rounded $1.92/gal. The NYMEX reformulated gasoline blendstock for February nudged up just over 2¢ to reach $1.45/gal.
Brent crude for March was up $1.52 to $62.70/bbl on London’s Intercontinental Exchange while the April contract gained $1.43 to settle at $62.59/bbl. The gas oil contract for February jumped $11 to $574.25/tonne on Jan. 18.
The average price for the Organization of Petroleum Exporting Countries’ basket of crudes was $60.90/bbl on Jan. 18, up $1.27.