MARKET WATCH: Crude oil benchmarks hold steady pending OPEC, EIA reports

Crude oil benchmarks gained modestly on the New York and London markets Jan. 17 on news of possible world oil supply risks due to political uncertainty. Analysts said crude prices held steady pending release of a monthly report from the Organization of Petroleum Exporting Countries.

Crude oil benchmarks gained modestly on the New York and London markets Jan. 17 on news of possible world oil supply risks due to political uncertainty. Analysts said crude prices held steady pending release of a monthly report from the Organization of Petroleum Exporting Countries.

Militants in Nigeria warned they intend to target offshore oil infrastructure in coming days. Meanwhile, unrest continues in Iran and Venezuela.

Analysts partially blame militant groups in the Niger Delta for contributing to Nigeria’s production decline to about 1 million b/d in 2016 from a peak of 2.2 million b/d.

The US Energy Information Administration was scheduled to release its weekly oil and product report on Jan. 18, a day later than normal in observance of Martin Luther King Jr. Day on Jan. 15 (OGJ Online, Jan. 18, 2018).

OPEC on Jan. 18 attributed strengthening oil prices to the production-cut targets that OPEC and some non-OPEC countries have agreed on and extended until Dec. 31, 2018. The OPEC basket of crudes average $62.06/bbl in December 2017—its highest since June 2015, a monthly report said.

The cartel increased its 2018 forecast for non-OPEC supply growth to average 1.15 million b/d, saying the revision was driven mostly by anticipated higher US unconventional oil production as well as increased Canadian production.

OPEC crude supply in 2017 was estimated at 32.9 million b/d. The cartel’s crude supply for 2018 was forecast at 33.1 million b/d.

Secondary sources estimated OPEC’s December 2017 production at 32.42 million b/d, a minor increase of 42,000 b/d over November 2017. Crude oil production increased during December in Nigeria, Angola, and Algeria while production declined in Venezuela, the OPEC Monthly Oil Market Report said.

Separately, Borkhataria Biraj, analyst with RBC Europe Ltd., said in a Jan. 15 research note that RBC is taking what he calls a conservative world oil demand growth forecast of 1.5 million b/d for 2018.

Energy prices

The February light, sweet crude contract on the New York Mercantile Exchange added 24¢ on Jan. 17 to $63.97/bbl. The March contract increased 25¢ to $63.92/bbl.

The NYMEX natural gas price for February rose 10¢ to a rounded $3.23/MMbtu. The Henry Hub cash gas price fell $1.22 to $3.87/MMbtu.

Ultralow-sulfur diesel for February edged up less than 1¢ to a rounded $2.07/gal. The NYMEX reformulated gasoline blendstock for February gained 2¢ to a rounded $1.86/gal.

The Brent crude contract for March on London’s ICE gained 23¢ to settle at $69.38/bbl on Jan. 17. The April contract was up 22¢ to $69/bbl. The gas oil contract for February was $611.75/tonne, down $3.

OPEC’s basket of crudes was $67.07/bbl on Jan. 17, down 47¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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