Light, sweet crude futures jumped by more than $1 to settle above $60/bbl on the New York market Feb. 14 while the Brent crude contracts also gained more than $1/bbl on the London market to close above $64/bbl.
“The main driver was the weakening US dollar,” said Ole Hansen, Saxo Bank head of commodity strategy. Oil is traded in US dollars so a weakening dollar makes oil less expensive for buyers starting with other currencies.
Analysts said the US dollar fell on rising US consumer prices and growing concerns about inflation.
“The dollar is getting hit quite hard and the market is worried about the US economic outlook,” Hansen said.
Separately, Saudi Arabia’s Energy Minister Khalid al-Falih said Saudi officials along with the rest of the Organization of Petroleum Exporting Countries remain committed to production-cut targets for the rest of 2018 despite anticipated rising US oil production.
“We believe we have to err on the safe side and make sure that the market has balanced,” al-Falih said at a news conference. “If we have to overbalance the market a little bit, then so be it.”
Energy prices
The March light, sweet crude contract on the New York Mercantile Exchange gained $1.41 on Feb. 14 to settle at $60.60/bbl. The April contract rose $1.48 to $60.51/bbl.
The NYMEX natural gas price for March remained at a rounded $2.59/MMbtu, down less than 1¢. The Henry Hub cash gas price dropped 6¢ to $2.51/MMbtu.
Ultralow-sulfur diesel for March increased by a rounded 5¢ to a rounded $1.88/gal. The NYMEX reformulated gasoline blendstock for March gained nearly 3¢ to a rounded $1.71/gal.
Brent on London’s ICE for April gained $1.64 to $64.36/bbl. The May contract was up $1.58 to $64.02/bbl. The gas oil contract for March was $550/tonne, up $4.25.
OPEC’s basket of crudes was $60.62/bbl on Feb. 14, up 10¢.
Contact Paula Dittrick at [email protected].
