MARKET WATCH: NYMEX oil prices settle back above $65/bbl
Light, sweet crude oil for March delivery on the New York market gained more than $1 on Feb. 1 to settle at $65.80/bbl. Meanwhile, some investment bankers have increased their 2018 oil price forecasts.
Goldman Sachs Group Inc. on Feb. 1 said it now estimates Brent crude oil will reach $75/bbl during the next 3 months and $82.50/bbl within 6 months. Goldman Sachs’ previous estimate for both periods was $62/bbl.
“The rebalancing of the oil market has likely been achieved, 6 months sooner than we had expected,” Goldman’s analysts wrote in an e-mail to the Wall Street Journal. “The decline in excess inventories was fast-forwarded in late 2017 by stellar demand growth, high OPEC compliance, heavy maintenance as well as collapsing Venezuela production.”
The Organization of Petroleum Exporting Countries and other major producers have largely held to their production-cut target agreements, initially negotiated in 2016 and now extended through Dec. 31.
Goldman also said US shale production will be needed to keep the market steady in the near term. Analysts believe any ramp-up in OPEC production will lag the market rebalancing.
JPMorgan Chase & Co.’s forecast that Brent will average $70/bbl in 2018, saying that Brent could rise to about $78/bbl because the oil supply-demand balance worldwide is tightening faster than anticipated.
Morgan Stanley analysts recently said Brent crude oil will reach $75/bbl in 2018.
Energy prices
The March light, sweet crude contract on the New York Mercantile Exchange jumped $1.07 on Feb. 1 to settle at $65.80/bbl. The April contract was up 99¢ to $65.55/bbl.
The NYMEX natural gas price for March settled at a rounded $2.86/MMbtu, down 14¢. The Henry Hub cash gas price fell 19¢ to $3.02/MMbtu.
Ultralow-sulfur diesel for March gained 2¢ to a rounded $2.09/gal. The NYMEX reformulated gasoline blendstock for March gained less than 1¢ to a rounded $1.90/gal.
Brent on London’s ICE for April gained 76¢ to $69.65/bbl. The May contract was up 78¢ to $69.35/bbl. The gas oil contract for February gained $5.25 to $616.75/tonne.
OPEC’s basket of crudes was $66.83/bbl on Feb. 1, up 55¢.
Contact Paula Dittrick at [email protected].
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.
