MARKET WATCH: NYMEX crude price dips to lowest since April
Light, sweet crude oil prices dropped for a fifth consecutive trading session on the New York market Nov. 2 with the front-month contract closing at its lowest price since Apr. 6. Brent crude oil prices dropped to settle at the lowest since Aug. 21 in London.
The weekly US rig count fell for the week ended Nov. 2 after 3 consecutive weeks of increases. Baker Hughes said its tally showed the US drilling rig count down 1 unit to 1,067 rigs. The count is up 169 units from the 898 rigs working this time a year ago (OGJ Online, Nov. 2, 2018).
UBS Wealth Management analysts maintained their forecast of a 1-1.5 million b/d reduction in Iranian exports from April to Dec. 31. US oil sanctions against Iran were fully implemented this month.
US President Donald Trump in May announced a US withdrawal from an international agreement that lifted earlier sanctions against Iran in exchange for that nation’s cooperation on its nuclear program.
Eight countries that US officials will receive temporary exemptions allowing them to continue buying Iranian oil. They reportedly include China, Japan, and India.
Sara Vakhshouri, president of SVB Energy International of Washington, DC, said she expects crude prices will rise in November upon the Iran sanctions although she doubts the oil market will experience a price shock in November.
Ole Hansen of Saxo Bank said, “Producers pumping at will together with a clouded outlook for demand and reduced concerns about Iran sanctions has raised the question of whether we have seen a fundamental shift in the market.
“In order to gauge whether this is the case, the market will be watching closely the price behavior as West Texas Intermediate approaches $60/bbl and particularly Brent at $70/bbl, a level which has provided resistance and then support on several occasions since January.”
Energy prices
The December light, sweet crude contract on the New York Mercantile Exchange dropped 55¢ on Nov. 2 to $63.14/bbl. The January contract fell 53¢ to settle at $63.28/bbl.
The NYMEX natural gas price for December was up 4¢ to a rounded $3.28/MMbtu.
Ultralow-sulfur diesel for December dropped nearly 3¢ to a rounded $2.18/gal. The NYMEX reformulated gasoline blendstock for December fell less than 1¢ to a rounded $1.71/gal.
Brent crude oil for January was down 6¢ to $72.83/bbl on London’s International Commodity Exchange. The February contract dropped 13¢ to $72.83/bbl. The gas oil contract for November fell $7.50 on Nov. 2 to close at $678.25/tonne.
The Organization of Petroleum Exporting Countries’ basket of crudes average for Nov. 2 was $71.36/bbl, down 72¢.
Contact Paula Dittrick at [email protected].
About the Author
Paula Dittrick
Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.