MARKET WATCH: NYMEX holds under $61/bbl on forecasts of higher shale production

Oil price benchmarks gained marginally on New York and London markets Mar. 14 but waivered in Mar. 15 trading. Despite forecasts for robust world oil demand, analysts say growing US shale production could restrict US light, sweet oil prices.

Oil price benchmarks gained marginally on New York and London markets Mar. 14 but waivered in Mar. 15 trading. Despite forecasts for robust world oil demand, analysts say growing US shale production could restrict US light, sweet oil prices.

The International Energy Agency forecast world oil demand will rise 1.5 million b/d to average 99.3 million b/d in 2018. IEA’s monthly Oil Market Report, released Mar. 15, said its forecast included an upward revision of 90,000 b/d compared with last month’s report.

IEA’s report comes a day after the Organization of Petroleum Exporting Countries raised its forecast for US shale production. OPEC’s Monthly Oil Market Report forecast US shale production will average 5.72 million b/d in 2018 (OGJ Online, Mar. 14, 2018).

Separately, the US Energy Information Agency said US oil production for the week ended Mar. 9 was 10.38 million b/d, up 12,000 b/d over the previous week.

EIA’s Petroleum Status Report said production across the Lower 48 was 9.37 million b/d, up 20,000 b/d from the previous week. Alaska’s production fell 8,000 b/d to 509,000 b/d for the week ended Mar. 9.

US crude oil inventories, excluding the Strategic Petroleum Reserve, increased by 5 million bbl for the week ended Mar. 9 vs. the previous week to 430.9 million bbl, EIA said (OGJ Online, Mar. 14, 2018).

Energy prices

The April light, sweet crude contract on the NYMEX gained 25¢ on Mar. 14 to settle at $60.96/bbl. The May contract rose 27¢ to $61.02/bbl.

The NYMEX natural gas price for April dropped 5.5¢ to $2.73/MMbtu. The Henry Hub cash gas price fell 10¢ to $2.66/MMbtu on Mar. 14.

Ultralow-sulfur diesel for April increased by 1¢ to a rounded $1.89/gal. The NYMEX reformulated gasoline blendstock for April gained nearly 4¢ to $1.92/gal.

Brent crude oil for May increased 25¢ to $64.89/bbl on London’s International Commodity Exchange. The June contract was up 24¢ to $64.76/bbl. The gas oil contract for April was $572.25/tonne, up $3.50.

OPEC’s basket of crudes was $61.97/bbl on Mar. 14, down 18¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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