MARKET WATCH: NYMEX crude oil price drops on global economic concerns
Light, sweet crude oil prices fell to their lowest level in more than a week on the New York market Feb. 7 on what analysts called concerns about world economics that could slow oil demand.
The Bank of England warned of a world economic slowdown. Meanwhile, a White House economic adviser told Fox Business Network that US-China negotiations are not close to reaching a trade agreement. China is a major oil consumer.
Several analysts have recently noted light, sweet crude oil is in a $50-55/bbl range, which some of them suggest could continue until a resolution in US-China trade negotiations.
In Libya, a Libyan general took control of Sharara oil field earlier this week, raising the likelihood for production to restart, which would bring more oil to the global market and put downward pressure on prices.
Sharara, which can produce 315,000 b/d, was shut in during late 2018 after armed gunmen tool control of the field. Libya, a member of the Organization of Petroleum Exporting Countries, was exempted from the latest production-cut agreement by OPEC and some non-OPEC countries.
Commerzbank analysts said, “Higher oil production in Libya again would increase the pressure on the other OPEC countries to consistently implement the production cuts.”
OPEC and 10 non-OPEC members agreed in December 2018 to reduce production by 1.2 million b/d total for the first half of 2019.
Energy prices
The March contract for light, sweet crude oil on the New York Mercantile Exchange decreased $1.37 to settle at $52.64/bbl on Feb. 7 while the contract for April delivery dropped $1.34 to settle at $53/bbl.
NYMEX natural gas for March fell 11¢ to a rounded $2.55/MMbtu on Feb. 7.
Ultralow-sulfur diesel for March dropped a penny to a rounded $1.90/gal. The NYMEX reformulated gasoline blendstock for March decreased 3¢ to a rounded $1.43/gal.
Brent crude for April delivery decreased $1.06 to settle at $61.63/bbl while the May contract decreased $1.11 to settle at $61.63/bbl. The gas oil contract for February fell $8 to $574.25/tonne on Feb. 7.
The average price for OPEC’s basket of crudes was $61.57/bbl on Feb. 7, down 73¢.
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.