Light, sweet crude oil prices for July and August dropped steeply by more than $2 on July 12 to settle below $52/bbl on the New York market while Brent crude oil also dipped by more than $2 in London to settle under $60/bbl.
US oil futures reached their lowest settlement since January after the US Energy Information Administration said US oil inventories, excluding the Strategic Petroleum Reserve, rose by 2.2 million bbl for the week ended June 6.
Analysts and traders surveyed by the Wall Street Journal expected stockpiles to fall by 600,000 bbl.
Ole Hansen, Saxo Bank head of commodity strategy, described crude oil as being in a “fragile state given the overriding focus on demand growth concerns,” adding, “These demand worries have led to speculation that the OPEC+ group will need to keep production cuts in place well into 2020 if they can agree to a deal.”
Hansen noted Russia has yet to commit to maintaining production cuts into this year’s second half. The Organization of Petroleum Exporting Countries and other major producers, including Russia, are scheduled to meeting in Vienna in late June.
Ryan Dusek, Opportune LLP Commodity Risk Advisory Group director, said he expects “long-term downward pressure on West Texas Intermediate crude oil prices.” He suggested oil futures could settle below $20/bbl in 2023.
But for the short-term outlook, Dusek said WTI prices possibly could “breech $70/bbl this year.”
Energy prices
Light, sweet crude oil on the New York Mercantile Exchange for July delivery plunged $2.13 to $51.14/bbl while the August contract decreased $2.15 to settle at $51.37/bbl.
NYMEX natural gas for July was down 1¢ to settle at a rounded $2.39/MMbtu.
Ultralow-sulfur diesel for July decreased 4¢ to a rounded $1.78/gal. The NYMEX reformulated gasoline blendstock for July fell 7¢ to a rounded $1.68/gal.
Brent crude for August dropped $2.32 to $59.97/bbl. The September price decreased $2.26 to settle at $58.19/bbl.
The gas oil contract for June was unchanged at $559.25/tonne on June 12.
The average for OPEC’s basket of crudes was down $1.55 to $61.01/bbl on June 12.
Contact Paula Dittrick at [email protected].
