Brent crude oil for June delivery briefly reached above $73/bbl on Apr. 11 before dropping to settle just above $72/bbl on the London market while US light, sweet crude oil reached above $67/bbl before dropping to settle just above $66.80/bbl on the New York market.
The benchmarks remained at their highest levels since 2014 before oil prices slumped upon ample world oil supplies amid escalating US shale production. Oil prices jumped earlier this week on escalating Middle Eastern tensions.
US President Donald Trump warned Russia to “get ready” for US missiles to be fired at Syria. A military strike toward Syria could disrupt oil supply across the Middle East even though Syria itself is not a major oil producer, analysts said.
The Organization of Petroleum Exporting Countries released a monthly report Apr. 12 saying its oil production declined by 201,000 b/d in March compared with the same period last year. OPEC production averaged 31.96 million b/d in March, the cartel’s April Monthly Oil Market Report said. OPEC noted lower production in Angola, Venezuela, Algeria, and Saudi Arabia.
Yet, the world’s total oil supply rose by 180,000 b/d in March because of higher output from non-OPEC producers, including US production from unconventional plays.
Separately, the US Energy Information Administration reported US oil production for the week ended Apr. 6 rose by 65,000 b/d to 10.525 million bbl.
Production across the Lower 48 climbed 85,000 b/d to 10.027 million b/d, which it was partially offset by a 20,000-b/d drop in Alaska production to 498,000 b/d, said EIA’s Petroleum Status Report.
US crude oil inventories, excluding the Strategic Petroleum Reserve, increased by 3.3 million bbl for the week ended Apr. 6 to 428.6 million bbl, putting oil in storage in the lower half of the average range for this time of year (OGJ Online, Apr. 11, 2018).
The May light, sweet crude contract on the NYMEX climbed $1.31 on Apr. 11 to settle at $66.82/bbl. The June contract rose $1.30 to $66.74/bbl.
The NYMEX natural gas price for May gained a rounded 2¢ to a rounded $2.67/MMbtu. The Henry Hub cash gas price remained unchanged at $2.69/MMbtu.
Ultralow-sulfur diesel for May rose by a rounded 2.8¢ to $2.09/gal. The NYMEX reformulated gasoline blendstock for May settled up nearly 3¢ to a rounded $2.07/gal.
Brent crude oil for June increased $1.02 to settle at $72.06/bbl on London’s International Commodity Exchange. The July contract climbed $1.04 to $71.46/bbl. The gas oil contract for April was $644.25/tonne, up $16.50.
OPEC’s basket of crudes averaged $68.29/bbl on Apr. 11, up $1.34.
Contact Paula Dittrick at [email protected].