MARKET WATCH: NYMEX, Brent crude oil prices split directions

Light, sweet crude oil prices on the New York market gained modestly on Feb. 20 to approach $62/bbl while Brent prices in London dropped but held above $65/bbl pending release of US government weekly inventory reports.

Light, sweet crude oil prices on the New York market gained modestly on Feb. 20 to approach $62/bbl while Brent prices in London dropped but held above $65/bbl pending release of US government weekly inventory reports.

But oil prices fell in early Feb. 21 pending the American Petroleum Institute’s estimate later in the day regarding US oil and product inventory levels for the week ended Feb. 16. The US Energy Information Administration was scheduled to release its closely watched report on Feb. 22.

“Oil prices are down, but they’re still trading in their recent price range,” Harry Tchilinguirian, BNP Paribas global head of commodity market strategy, told the Wall Street Journal of Feb. 21 oil prices.

Prices are being pulled in two directions, he said. Support is coming from recent comments from the Organization of Petroleum Exporting Countries regarding a commitment to compliance with production-cut targets set by OPEC and major non-OPEC producers.

Meanwhile, crude prices are being pulled down by investors’ concerns about forecasts for rising US shale production, Tchilinguirian said.

Commerzbank analysts pointed to a rally in the US dollar as also putting pressure on oil prices.

“Oil prices are likely to slide for as long as the US dollar appreciates, especially since fundamental data also point more towards falling prices,” Commerzbank said in a research note.

The WSJ Dollar Index, which measures US currency against a basket of 16 others, has risen for several days after having declined sharply earlier in the year. Oil is traded in US dollars, so a stronger dollar makes oil more expensive for buyers starting with other currencies. Analysts suggest US 10-year Treasury yields contributed to the dollar’s recent rally.

Energy prices

The March light, sweet crude contract on the New York Mercantile Exchange gained 22¢ on Feb. 20 to settle at $61.90/bbl. The April contract rose 24¢ to $61.79/bbl.

The NYMEX natural gas price for March climbed nearly 6¢ to a rounded $2.61/MMbtu. The Henry Hub cash gas price also was $2.61/MMbtu on Feb. 20. US commodity markets were closed on Feb. 19 for the Presidents Day holiday in the US.

Ultralow-sulfur diesel for March increased by nearly 2¢ to a rounded $1.93/gal. The NYMEX reformulated gasoline blendstock for March fell by less than a penny to remain at a rounded $1.75/gal.

Brent crude oil for April settled down 42¢ to $65.25/bbl on London’s International Currency Exchange. The May contract also was down by 34¢ to $65.05/bbl. The gas oil contract for March was $554.25/tonne.

OPEC’ basket of crudes was $62.81/bbl on Feb. 20, down 8¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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