MARKET WATCH: Crude oil prices drop on volatile equity markets

Light, sweet crude oil prices for March delivery dropped modestly to settle above $61/bbl on Feb. 8 on the New York market while Brent crude oil for April delivery also dropped modestly to settle above $64/bbl on the London market.

Light, sweet crude oil prices for March delivery dropped modestly to settle above $61/bbl on Feb. 8 on the New York market while Brent crude oil for April delivery also dropped modestly to settle above $64/bbl on the London market.

Moty Kuperberg, director of oil and gas for Dynamic Shipping Services Ltd., in Haifa, Israel, said he finds no market fundamentals to consistently support crude prices above $75/bbl in coming months despite some recent higher forecasts by others.

Kuperberg, who directs a project called the Independent Energy Security Agency, notes the average price of crude oil in 2010–14 was over $100/bbl until it sharply declined to $56/bbl by Dec. 31, 2014. Kuperberg has written a book, “Energy Future Fossils and Beyond,” which discusses energy security and sustainability, particularly focusing on oil and natural gas.

Separately, other analysts said the oil market is nervous following a volatile week for the equity markets. Stock market benchmarks worldwide appeared headed for their worst week in years as indexes in Germany, China, and Japan appeared likely to join the US Dow Jones Industrial Average and S&P 500, both are which are in what economists are calling “correction territory.”

Meanwhile, China appears closer to establishing its own oil futures market. Oil has traded for decades in US dollars, but the China Securities Regulatory Commission said China, a major crude oil importer, plans to launch its own crude contract based on the yuan by Mar. 31 on the Shanghai International Energy Exchange.

Chinese regulators have discussed creating a futures contract for nearly 5 years to create a rival benchmark to London’s Brent and New York’s light, sweet crude oil.

Energy prices

The March light, sweet crude contract on the New York Mercantile Exchange fell 64¢ on Feb. 8 to settle at $61.15/bbl. The April contract was down 61¢ to $60.94/bbl.

The NYMEX natural gas price for March was down by less than 1¢ to remain t a rounded $2.70/MMbtu. The Henry Hub cash gas price fell 2¢ to $2.71/MMbtu.

Ultralow-sulfur diesel for March declined by 1¢ to a rounded $1.92/gal. The NYMEX reformulated gasoline blendstock for March fell 1¢ to a rounded $1.76/gal.

Brent on London’s ICE for April fell 70¢ to $64.81/bbl. The May contract was down 66¢ to $64.49/bbl. The gas oil contract for February declined $11 to $568/tonne.

The Organization of Petroleum Exporting Countries’ basket of crudes was $62.69/bbl on Feb. 8, down $1.61.

Contact Paula Dittrick at paulad@ogjonline.com.

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