MARKET WATCH: NYMEX oil, gas prices rise on US-China trade tensions
The light, sweet crude oil prices for October gained nearly $1 on the New York market Sept. 18 to settle at $69.85/bbl while the Brent crude contract for November delivery also jumped nearly $1 in London to settle just above $79/bbl.
US-China trade hostilities continued to escalate as each side recently announced new tariffs having numerous potential consequences to commodities, including slowing long-term US LNG export growth.
Crude oil was excluded from the latest tariff announcement. Government statistics show US crude oil exports to China reached record levels in June.
Late Sept. 17, the White House announced new tariffs on $200 billion worth of Chinese goods beginning Sept. 24, including various aluminum and steel items excluded from tariffs imposed in March. Within hours, China announced retaliatory tariffs on $60 billion worth of US imports, which included a 10% tariff on LNG effective that day.
The duty comes as a second wave of US LNG export projects seek financing. Any impediment to tapping China’s LNG demand, which S&P Global Platts Analytics expects to reach 10 bcfd within 10 years, could diminish the likelihood of final investment decisions for some projects.
“A number of export projects vying for long-term offtake contracts are now effectively barred from the Chinese market, which is expected to account for a third of global LNG demand growth over the next 5 years,” said Ross Wyeno of Platts Analytics. “This could give an advantage to non-US suppliers such as Canada, the Middle East, and Russia.”
Energy prices
The light, sweet crude contract for October delivery on the New York Mercantile Exchange gained 94¢ to $69.85/bbl on Sept. 18. The November contract jumped 91¢ to settle at $69.59/bbl.
The NYMEX natural gas price for October gained nearly 12¢ to a rounded $2.93/MMbtu. The Henry Hub cash gas was $2.97/MMbtu, up 7¢.
Ultralow-sulfur diesel for October jumped nearly 3¢ to reach a rounded $2.24/gal. The NYMEX reformulated gasoline blendstock for October also gained nearly 3¢ to $2/gal.
Brent crude oil for November climbed 98¢ to $79.03/bbl on London’s International Commodity Exchange. The December contract rose by 94¢ to $78.53/bbl. The gas oil contract for October was $685/tonne, up $3.50.
The Organization of Petroleum Exporting Countries’ basket of crudes for Sept. 18 averaged $76.09/bbl, down 10¢.
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.