Light, sweet oil prices rose only slightly Mar. 6 to settle at $62.60/bbl on a second forecast this week of increasing US production.
The US Energy Information Administration raised its oil production estimate for 2018 on Mar. 6, which analysts said made for bearish fundamentals (OGJ Online, Mar. 6, 2018).
US crude oil production averaged 10.3 million b/d in February, up 230,000 b/d from the January level. EIA forecasts US crude oil production will average 10.7 million b/d in 2018, which would mark the highest annual average, surpassing the 9.6 million b/d record set in 1970.
EIA forecasts that 2019 crude oil production will average 11.3 million b/d. EIA’s update came after the International Energy Agency outlined rising US oil production in a 5-year forecast on Mar. 5.
“While the market was able to absorb [the IEA’s forecast]…it was not able to do the same with” the EIA outlook, Commerzbank analysts said in a note.
Preliminary reports said the American Petroleum Institute’s Weekly Statistical Bulletin showed a 5.66 million-bbl increase in US crude supplies for the week ended Mar. 2.
EIA was scheduled to release its weekly oil and products inventory later Mar. 7.
James Williams, president of London, Ark.-based energy researcher WTRG Economics, said if API’s estimated US crude build “gets confirmed by the EIA, we’ll probably have a few days of lower crude prices.”
Energy prices
The April light, sweet crude contract on the NYMEX gained 3¢ on Mar. 7 to settle at $62.60/bbl. The May contract rose 6¢ to $62.45/bbl.
The NYMEX natural gas price for April rose 4.5¢ to a rounded $2.75/MMbtu. The Henry Hub cash gas price was up 6¢ to $2.73/MMbtu on Mar. 6.
Ultralow-sulfur diesel for April increased by less than 1¢ to remain at a rounded $1.90/gal. The NYMEX reformulated gasoline blendstock for April edged down less than 1¢ to $1.93/gal.
Brent crude oil for May settled up $1.42 to $65.79/bbl on London’s International Commodity Exchange. The June contract was up $1.44 to $65.55/bbl. The gas oil contract for March was $571.50/tonne, down 50¢.
OPEC’s basket of crudes was $63.25/bbl on Mar. 6, down $1.64.
Contact Paula Dittrick at [email protected].
