MARKET WATCH: NYMEX oil holds above $65/bbl, Brent above $70/bbl

Light, sweet crude oil for March delivery declined slightly but still settled above $65.50/bbl on the New York market, supported by confusion about varying statements from US President Donald Trump and his administration about the US dollar’s value.

Light, sweet crude oil for March delivery declined slightly but still settled above $65.50/bbl on the New York market, supported by confusion about varying statements from US President Donald Trump and his administration about the US dollar’s value.

Oil trades in US dollars so a falling dollar makes oil less expensive for buyers using other currencies. Brent crude oil for March delivery fell slightly but settled above $70/bbl.

President Trump “did attempt…to dispel the impression that his government prefers a weak US dollar…but he didn’t really succeed,” Commerzbank analysts said. “For as long as the US dollar remains on the defensive, no more pronounced price fall on the oil market is likely to ensue.”

In an interview with The Wall Street Journal, US Treasury Sec. Steven Mnuchin said his comment that “a weaker dollar is good for trade” was never intended to violate US commitment to refrain from competitive devaluation.

Mnuchin’s initial comment came during the World Economic Forum in Davos, Switzerland (OGJ Online, Jan. 25, 2018).

Mnuchin later told the WSJ that his weaker dollar statement did not intend to “endorse it or encourage it in any way,” adding the dollar’s short-term direction is “not a concern of mine one way or the other.”

After Mnuchin’s comment on Jan. 24, the dollar’s value in relation to other currencies dropped to 3-year lows, its biggest one-day drop in 10 months.

Barclays revised upward its Brent crude oil forecast for 2018 to average $60/bbl, up $5 from its earlier forecast. Barclays analysts citied higher oil demand growth and continuing Venezuela oil production as the reasons for the updated forecast.

Energy prices

The March light, sweet crude contract on the New York Mercantile Exchange dropped 10¢ on Jan. 25 to settle at $65.51/bbl. The April contract increased 1¢ to $65.37/bbl.

The NYMEX natural gas price for February dropped 6¢ to a rounded $3.45/MMbtu. The Henry Hub cash gas price climbed 1¢ to $3.57/MMbtu.

Ultralow-sulfur diesel for February edged up less than 1¢ to a rounded $2.12/gal. The NYMEX reformulated gasoline blendstock for February edged down less than 1¢ to remain at a rounded $1.92/gal.

Brent on London’s ICE for March fell 11¢ to $70.42/bbl. The April contract was down 5¢ to $69.97/bbl. The gas oil contract for February reached $627.25/tonne, up $6.75.

The Organization of Petroleum Exporting Countries’ basket of crudes was $68.48/bbl on Jan. 25, up 87¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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