MARKET WATCH: Brent breaks above $80/bbl during May 17 trading
Brent crude oil for July delivery reached above $80/bbl during May 17 trading on the London market, its highest level since November 2014. The benchmark had settled May 16 above $79/bbl. Analysts forecast Brent would break the $80/bbl mark on growing Iran tensions.
Oil prices have climbed while European firms withdraw or contemplate withdrawing from investment plans in Iran after US President Donald Trump announced plans to reimpose US sanctions against Iran.
Total SA said May 16 that it stopped work on its South Pars 11 natural gas development (OGJ Online, May 16, 2018). Shippers of Iranian oil and insurance companies underwriting such shipments are considering whether they will reduce or stop such activities.
Meanwhile, the European Union continues supporting the 2015 international agreement that lifted sanctions against Iran in return for Iran curbing its nuclear program. Trump decided in favor of a US exit from that agreement, questioning Iran’s compliance.
EU officials are encouraging Iran to remain in the agreement. If European companies pull out of investments, “Iran is like, well what’s the point” of sticking by the agreement, Amrita Sen, analyst at Energy Aspects, told the Wall Street Journal.
Separately, the US Energy Information Administration reported US oil production reached 10.723 million b/d for the week ended May 11, up 20,000 b/d from the previous week. All the increase came from the Lower 48, which produced 10.221 million b/d for the week ended May 11.
The Weekly Petroleum Status Report also showed US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, decreased by 1.4 million bbl for the week ended May 11 to 432.4 million bbl. US oil inventories are in the lower half of the average range for this time of year, EIA said.
Energy prices
The June light, sweet crude contract on the New York Mercantile Exchange gained 18¢ on May 16 to settle at $71.49/bbl. The July price was up 19¢ to $71.56/bbl.
The NYMEX natural gas price for June declined 2¢ to remain at a rounded $2.82/MMbtu. The Henry Hub cash gas price dropped 5¢ to $2.78/MMbtu on May 16.
Ultralow-sulfur diesel for June added 2¢ to settle at a rounded $2.27/gal. The NYMEX reformulated gasoline blendstock for June gained 4.5¢ to settle at a rounded $2.25/gal.
Brent crude oil for July increased 85¢ to settle at $79.28/bbl on London’s International Commodity Exchange. The August contract was up 90¢ to $79.17/bbl. The gas oil contract for June was $684.50/tonne, down $3.
The Organization of Petroleum Exporting Countries’ basket of crudes was $75.18/bbl for May 16, down 29¢.
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.