MARKET WATCH: NYMEX oil price holds above $55/bbl awaiting EIA inventory report
Light, sweet crude oil prices traded higher on the New York Mercantile Exchange Feb. 26 after the American Petroleum Institute reported US oil supplies fell by more than 4 million bbl for the week ended Feb. 22.
The US Energy Information Administration is expected to release its oil and product inventory report later Feb. 27.
Ole Hansen, Saxo Bank head of commodity strategy, said world oil demand remains robust despite data pointing to a world economic showdown.
“A slowdown, which negatively impacts demand growth, could be the trigger that requires an extension of the current deal,” Hansen said of agreed production cuts by the Organization of Petroleum Exporting Countries and some other producers, including Russia.
Meanwhile OPEC member Libya has yet to restart Sharara field, which can produce about 300,000 b/d, saying it is still not safe after militants seized it, Bloomberg reported.
The standoff over Sharara is entering its third month. Libya’s state-run National Oil Corp.’s Chairman Mustafa Sanalla said Feb. 24 NOC will not resume production while armed groups remain.
The Libyan National Army, loyal to eastern leader Khalifa Haftar, has said the field is ready to restart.
“The circumstances that made us declare force majeure still exist now and therefore we can’t lift the ban,” Sanalla told Bloomberg.
Libya has experienced repeated oil disruptions. The country produced 1.1 million b/d in 2018, which was the highest since 2012 but still just about two thirds of production before a 2011 civil war.
Energy prices
The April contract for light, sweet crude oil on the New York Mercantile Exchange gained 2¢ to settle at $55.50/bbl on Feb. 26. The contract for May delivery increased 5¢ to settle at $55.97/bbl.
NYMEX natural gas for March gained nearly 2¢ to a rounded $2.86/MMbtu on Feb. 26.
Ultralow-sulfur diesel for March rose 2¢ to a rounded $1.99/gal. The NYMEX reformulated gasoline blendstock for March increased 4¢ to a rounded $1.58/gal.
Brent crude for April delivery gained 45¢/bbl to settle at $65.21/bbl while the May contract also increased 45¢/bbl to settle at $65.36/bbl. The gas oil contract for March gained $6.75 to $615.75/tonne on Feb. 26.
The average price for OPEC’s basket of crudes was $64.08/bbl on Feb. 26, down $1.28.
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.