MARKET WATCH: Brent climbs above $68/bbl, NYMEX crude tops $63/bbl

Oil prices rose by more than $1/bbl on both New York and London markets on Apr. 9, and analysts attributed the rally to fears about trade wars and to favorable crude market fundamentals.

Oil prices rose by more than $1/bbl on both New York and London markets on Apr. 9, and analysts attributed the rally to fears about trade wars and to favorable crude market fundamentals.

“Hawkish appointments to lead the US National Security Council and State Department indicate a potential hardline shift in US foreign policy disposition toward large producing states like Iran and Venezuela,” said Rory Johnson, Scotiabank economics analyst, in an Apr. 9 research note.

US President Donald Trump’s administration has a May 12 deadline to decide whether to extend Iranian sanctions waivers.

“It appears increasingly likely that the White House will begin backing away from the deal,” Johnson said of the international agreement associated with Iran’s nuclear program.

Iran’s oil production has increased since the lifting of sanctions. Currently, Iran’s oil production is estimated at 3.8 million b/d compared with 2.6 million in early 2015.

“Meanwhile, potential economic sanctions against Venezuela could put further pressure on the country’s increasing fragile oil industry,” Johnson said. Venezuela is more dependent on US refineries along the Gulf of Mexico coast than many people might realize, he said, adding that those refineries process much of Venezuela’s heavy oil.

Energy prices

The May light, sweet crude contract on the New York Mercantile Exchange climbed $1.36 on Apr. 9 to settle at $63.42/bbl. The June contract rose $1.33 to $63.43/bbl.

The NYMEX natural gas price for May edged down less than 1¢ to a rounded $2.69/MMbtu. The Henry Hub cash gas price on Apr. 9 fell 8¢ to $2.71/MMbtu.

Ultralow-sulfur diesel for May rose nearly 4¢ to a rounded $2/gal. The NYMEX reformulated gasoline blendstock for May settled up 2.9¢ to a rounded $1.98/gal.

Brent crude oil for June increased $1.54 to $68.65/bbl on London’s International Commodity Exchange. The July contract climbed $1.50 to $68.18/bbl. The gas oil contract for April was $613.25/tonne, up $10.50.

The Organization of Petroleum Exporting Countries basket of crudes averaged $65.09/bbl on Apr. 9, up 27¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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