The light, sweet crude oil contract for January delivery fell nearly 90¢ but held above $57/bbl on the New York market Dec. 4 while Brent crude oil for February fell more than $1, setting below $63/bbl—its biggest single-day decline since early October.
The crude benchmarks dropped after the Organization of Petroleum Exporting Countries and some non-OPEC producers agreed on Nov. 30 to extend the existing production-cut targets through Dec. 31, 2018.
The latest producers’ agreement on production-cut targets includes a cap on Libyan and Nigerian production. Production levels will be reviewed again in June 2018, OPEC said.
Analysts generally blamed the Dec. 4 price drop on oil investors’ concerns that rising US shale production could counteract efforts to reduce oil supplies worldwide.
Market participants awaited weekly inventory estimates from the American Petroleum Institute and the US Energy Information Administration for the week ended Dec. 1.
The API report comes out late Dec. 5 while EIA releases its inventory on Dec. 6.
Reuters reported that its own survey indicates OPEC has shown strong compliance with the supply cut targets with November production levels falling by 300,000 b/d to the cartel’s lowest level since May.
Energy prices
The January 2018 light, sweet crude contract on the New York Mercantile Exchange dropped 89¢ on Dec. 4 to $57.47/bbl. The February 2018 contract fell 89¢ to $57.49/bbl.
The NYMEX natural gas price for January decreased 7¢ to a rounded $2.98/MMbtu. The Henry Hub cash gas price was $2.90/MMbtu, down 6¢.
Heating oil for January fell nearly 5¢ to $1.89/gal. The NYMEX reformulated gasoline blendstock for December fell nearly 5¢ to a rounded $1.69/gal.
The Brent crude contract for February 2018 on London’s ICE decreased $1.28 to $62.45/bbl. The March 2018 contract was down $1.22 to $62.24/bbl.
The gas oil contract for December was $554.50/tonne.
OPEC’s basket of crudes was $61.46/bbl on Dec. 4, down 25¢.
Contact Paula Dittrick at [email protected].
