MARKET WATCH: Crude oil benchmarks decline on world economic concerns
Light, sweet crude oil prices fell modestly on the New York market Jan. 23 as did Brent crude oil prices in London. Analysts attributed the drop to lingering concerns about slowing world economic-growth concerns, which could slow oil demand growth.
The US oil future contract for March declined by 39¢ to settle at $52.62/bbl. Prices have fallen for two consecutive trading sessions and three out of the last four sessions.
“Right now, the market is kind of keyed in to growth risks stemming from US-China trade talks, and a slow start out of the gate for the US, given the government shutdown,” Chris Kettenmann, chief energy strategist at Macro Risk Advisors, told the Wall Street Journal.
Oil prices have rallied off late 2018 lows, Kettenmann said, adding, “The market is now looking for a little more clarification on issues like growth…to know where the market will be going.”
Analysts this week are watching the World Economic Forum in Davos, Switzerland, for indications of economic risks although some world leaders did not attend.
US President Donald Trump stayed in Washington, DC, to deal with the partial government shutdown. British Prime Minister Theresa May was absent as she works toward a deal for the UK to leave the European Union in an orderly manner. Chinese President Xi Jinping also did not attend as he deals with his nation’s decelerating economic growth rate.
Separately, the US Energy Information Administration was scheduled to release its weekly oil and product inventory report on Jan. 24, a day later than normal because of the Martin Luther King Jr. holiday on Jan. 21.
Energy prices
The April contract for light, sweet crude on the New York Mercantile Exchange dropped 38¢ to settle at $52.92/bbl.
NYMEX natural gas for February fell 6¢ to close at $2.98/MMbtu on Jan. 23.
Ultralow-sulfur diesel for February declined by nearly 1.25¢ to a rounded $1.89/gal. The NYMEX reformulated gasoline blendstock for February fell 1.5¢ to a rounded $1.39/gal.
Brent crude for March declined 36¢ to $61.14/bbl on London’s Intercontinental Exchange while the April contract fell 35¢ to settle at $61.03/bbl. The gas oil contract for February gained $2.75 to $568/tonne on Jan. 23.
The average price for the Organization of Petroleum Exporting Countries’ basket of crudes was $60.52/bbl on Jan. 23, down 14¢.
Contact Paula Dittrick at [email protected].
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.
