Crude oil benchmarks closed modestly higher on Oct. 26, approaching the end of a month in which volatility in global stock markets caused swings back and forth from steep losses to small gains.
Analysts said the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite were on track for their worst month in more than 8 years. Brent crude oil prices on the London market have dropped more than 10% from 4-year highs in early October.
Meanwhile, the US dollar strengthened during the last 4 weeks. Oil is traded in US dollars, so a stronger dollar makes oil more expensive for buyers using other currencies. The Wall Street Journal Dollar Index, a measure of the dollar against a basket of various currencies, was up 0.06% as of Oct. 29.
US oil sanctions against Iran are scheduled to become fully effective on Nov. 4. The WSJ reported China is cutting some of its Iranian oil purchases.
Sources told the WSJ that China National Petroleum Corp. and China Petrochemical Corp. have not booked any Iranian cargo for November. China had been importing about 600,000 b/d of Iranian crude.
Faced with falling oil exports, Iran’s oil production has been falling. The WSJ reported Iran’s production was 3.3 million b/d as of early October, down from 3.8 million b/d in May.
US President Donald Trump in May announced a US exit from an international agreement in which international sanctions were lifted against Iran in exchange for cooperation regarding its nuclear program.
Trump has encouraged other countries to also stop buying Iranian oil. Previously, China had resisted the idea of cutting its Iranian exports.
Energy prices
The December light, sweet crude contract on the New York Mercantile Exchange gained 26¢ on Oct. 26 to $67.59/bbl. The January contract was up 31¢ to settle at $67.75/bbl.
The NYMEX natural gas price for November was down nearly 2¢ to a rounded $3.18/MMbtu.
Ultralow-sulfur diesel for November increased 2¢ to a rounded $2.30/gal. The NYMEX reformulated gasoline blendstock for November edged up a fraction of a penny to remain at a rounded $1.81/gal.
Brent crude oil for December was up 73¢ to $77.62/bbl on London’s International Commodity Exchange. The January contract gained 78¢, reaching $77.66/bbl. The gas oil contract for November rose $6.75 on Oct. 25 to close at $713.50/tonne.
The Organization of Petroleum Exporting Countries’ basket of crudes was $75.71/bbl on Oct. 26, up 38¢.
Contact Paula Dittrick at [email protected].
