MARKET WATCH: NYMEX oil prices gain on Venezuela politics
Light, sweet crude oil prices gained on the New York market Jan. 24, which analysts attributed to geopolitics after US President Donald Trump recognized opposition leader Juan Guiado as interim president of Venezuela.
Meanwhile, existing President Nicolas Maduro also claims leadership of Venezuela. Venezuela’s military on Jan. 25 supported Maduro.
“The situation in Venezuela remains difficult to read. If civil war breaks out there, further cuts in oil production are likely, which will drive up the price,” said Commerzbank analysts.
US officials also threatened to impose sanctions on US imports of Venezuela’s oil. Venezuelan oil production has declined for years. The US imports about 500,000 b/d of heavy crude from Venezuela.
Separately, the US Energy Information Administration estimated US crude oil supplies, excluding the Strategic Petroleum Reserve, rose by almost 8 million bbl for the week ended Jan. 18 to 445 million bbl total (OGJ Online, Jan. 25, 2019).
EIA’s Weekly Petroleum Status Report said US oil production held flat at 11.9 million b/d for the week ended Jan. 18 compared with the previous week.
Barclays Research issued a Blue Drum research note in which its analysts said they still expect Brent and US light, sweet crude prices will increase during this year’s first half despite a recent oil price decline.
“We see the inventory situation as far better than the last time [production] cuts started in early 2017,” Barclays said on Jan. 24 referring to production cuts made by the Organization of Petroleum Exporting Countries and some non-OPEC producers, including Russia.
Cuts of 1.2 million b/d for the first half of this year became effective Jan. 1 although some nations already had cut back production starting in December.
Energy prices
The March contract for light, sweet crude oil on the New York Mercantile Exchange gained 51¢ to settle at $53.13/bbl while the April contract added 50¢ to settle at $53.42/bbl.
NYMEX natural gas for February rose nearly 12¢ to close at a rounded $3.10/MMbtu on Jan. 24.
Ultralow-sulfur diesel for February nudged down less than a penny to $1.88/gal. The NYMEX reformulated gasoline blendstock for February rose less than 1¢ to remain at a rounded $1.39/gal.
Brent crude for March declined 5¢ to $61.09/bbl on London’s Intercontinental Exchange while the April contract gained 13¢ to settle at $61.16/bbl. The gas oil contract for February declined 75¢ to $567.25/tonne on Jan. 24.
The average price for the OPEC basket of crudes was $60.22/bbl on Jan. 24, down 30¢.
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.