MARKET WATCH: NYMEX, Brent crude trade flat ahead of OPEC meeting

The light, sweet crude oil contract for January delivery declined slightly to settle just under $58/bbl Nov. 28 on the New York market while Brent crude oil for January also fell but still settled above $63/bbl.

The light, sweet crude oil contract for January delivery declined slightly to settle just under $58/bbl Nov. 28 on the New York market while Brent crude oil for January also fell but still settled above $63/bbl.

The Organization of Petroleum Exporting Countries meets in Vienna on Nov. 30. Some non-OPEC producers, including Russia, also will be there to discuss extending an existing 1.8 million b/d in production-cut targets. That total includes both OPEC and non-OPEC producers.

The agreement expires in March 2018, and an extension is expected although the length of the extension remains in question.

Sam Margolin and Jason Gabelman of Cowen Equity Research said consensus expectations among analysts for the OPEC meeting have moved to neutral or negative with concerns Russia might block a unified OPEC and non-OPEC extension through full year 2018.

But Cowen analysts believe the “OPEC whirlwind could be forgotten quickly with little change to fundamentals.” They said 2018 US production forecasts from every third-party organization, including OPEC, have been revised higher over the past 2 months.

“Market balance is achievable at current OPEC production levels,” Cowen said. “We do not see material change in the outlook despite noise around OPEC meeting expectations.”

Rystad Energy forecasts US oil production at 9.9 million b/d in December. The US Energy Information Administration previously estimated the nation’s oil production will reach 9.72 million b/d.

Artem Abramov, head of well research at Rystad Energy, said Hurricane Harvey and seasonal maintenance in Alaska contributed to misleading production data for August.

“In reality the gap between full production capacity and actual output exceeded 300,000 b/d, which is unprecedented in recent years,” Abramov said.

EIA is scheduled later Nov. 29 to release its weekly crude and products inventory report.

Energy prices

The January 2018 light, sweet crude contract on the New York Mercantile Exchange dropped 12¢ on Nov. 28 to $57.88/bbl. The February 2018 contract fell 11¢ to $58.05/bbl.

The NYMEX natural gas price for December increased 14¢ to a rounded $3.07/MMbtu. The Henry Hub cash gas price was $2.91/MMbtu.

Heating oil for December edged up than 1¢ to remain at a rounded $1.95/gal. The NYMEX reformulated gasoline blendstock for December fell 1¢ to a rounded $1.77/gal.

The Brent crude contract for January 2018 on London’s ICE decreased 23¢ to $63.61/bbl. The February 2018 contract was down 14¢ to $63.24/bbl.

The gas oil contract for December was up $1.50 to $565.75/tonne.

OPEC’s basket of crudes was $61.31/bbl on Nov. 26, down 20¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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