The light, sweet crude oil price for January delivery dropped more than $1 on the New York market Nov. 28 to settle below $51/bbl while Brent crude oil for January also dropped more than $1 to settle below $59/bbl.
The US Energy Information Administration estimated US crude oil inventories, excluding the Strategic Petroleum Reserve, increased by 3.6 million bbl for the week ended Nov. 23. The oil inventory build was much larger than analysts had expected.
US oil supplies have risen for 10 consecutive weeks. At 450.5 million bbl, US crude oil inventories are about 7% above the 5-year average for this time of year (OGJ Online, Nov. 29, 2018).
As of Nov. 28, crude prices have fallen in three of the last four sessions on the New York Mercantile Exchange, and US oil futures were down more than 30% since hitting a multiyear high of $76.41/bbl early October.
Analysts said oil prices are falling on higher US oil inventories and production combined with concerns that future oil demand could decline if the world economy slows due to US-China trade conflicts.
EIA’s Petroleum Status Report said US oil production was 11.7 million b/d for the week ended Nov. 23, which was unchanged from the previous week.
Looking ahead, analysts and traders await the Nov. 30-Dec. 1 G20 summit in Argentina where Russia and Saudi Arabia likely will discuss oil production levels in preparation for a Dec. 6 OPEC meeting in Vienna. Some non-OPEC producers also will attend that meeting.
Russia’s President Vladimir Putin said Nov. 28 that current prices are fine for Russia. Saudi Arabia Crown Prince Mohammed bin Salman, already under pressure over the killing of journalist Jamal Khashoggi, does not want to risk damaging relations with US President Donald Trump who repeatedly has warned against high oil prices.
Energy prices
The January light, sweet crude contract on NYMEX closed Nov. 28 at $50.29/bbl, down $1.27. The February contract also fell $1.24 to $50.49/bbl.
Natural gas futures for December gained 45¢ to close at $4.71/MMbtu on Nov. 28.
Ultralow-sulfur diesel for December fell a rounded 5¢ to a rounded $1.84/gal. The NYMEX reformulated gasoline blendstock for December decreased 2¢ to a rounded $1.40/gal.
Brent crude oil for January decreased $1.45 to $58.76/bbl on London’s International Commodity Exchange. The February contract fell $1.31 to $59.09/bbl. The gas oil contract for December was $566/tonne, down $12.50.
OPEC’s basket of crudes for Nov. 28 averaged $59.25/bbl, up 20¢.
Contact Paula Dittrick at [email protected].
