MARKET WATCH: Oil benchmarks settle mixed for second consecutive trading session
Light, sweet crude oil prices declined slightly May 10 to settle under $62/bbl for both the June and July contracts on the New York market May 10 while Brent prices in London gained with the July contract holding above $70/bbl.
Ole Hansen, Saxo Bank head of commodity strategy, noted commodities were no exception to trade war-related risk aversion after US President Donald Trump’s administration increased tariffs on China. Energy commodities held up reasonably well, Hansen added.
US-China trade talks reportedly hit an impasse May 10 in Washington, DC. Hansen said the market adopted “a nervous wait-and-see approach,” adding that it’s “close to impossible” to make a short-term forecast for crude oil prices.
“Increasingly supportive supply fundamentals and geopolitical worries have been countered by trade-related weakness,” Hansen said. “But with geopolitical and supply risks continuing to build, we believe that renewed strength remains the biggest risk.”
A supportive driver for oil prices are tightening markets due to voluntary and involuntary production cuts worldwide, Hansen said, adding that is countered by risk of failed US-China trade talks prompting a world economic slowdown.
On May 12, White House economic adviser Larry Kudlow said China has invited US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing to continue trade negotiations.
Kudlow told “Fox News Sunday” that Trump and Chinese President Xi Jinping are likely to talk during a G20 meeting in Japan at the end of June.
Energy prices
Crude oil on the New York Mercantile Exchange for June fell 4¢ to settle at $61.66/bbl on May 10 while the July contract edged down 1¢ to settle at $61.80/bbl.
NYMEX natural gas for June gained 2¢ to a rounded $2.62/MMbtu.
Ultralow-sulfur diesel for June edged up less than 1¢ to a rounded $2.05/gal. The NYMEX reformulated gasoline blendstock for June gained 1¢ to a rounded $1.99/gal.
Brent crude for July was up 23¢ to $70.62/bbl. The August price increased 16¢ to settle at $69.64/bbl.
The gas oil contract for May ended unchanged at $632.25/tonne on May 10. The average for the Organization of Petroleum Exporting Countries’ basket of crudes was $70.66/bbl on May 10, up $1.
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.