Light, sweet crude futures rose for a second consecutive day Feb. 15, settling above $61/bbl. Oil prices on the New York market reversed direction Feb. 14-15 after falling more than 10% for 2 weeks on volatile world equity markets and growing US unconventional oil production.
The International Energy Agency forecast US oil production could reach 11 million b/d by 2019.
IEA also said world oil production could outpace oil demand in 2018 despite production-cut targets by the Organization of Petroleum Exporting Countries and some non-OPEC producers.
“If you look at the demand issue, the market is focusing on the fact that while oil demand is strong we are moving out of the peak season for oil demand,” said Michael Cohen, head of energy commodities research at Barclays.
Avid Lennox, Fat Prophets resource analyst, recently told Platts that US record production could be the “nail in the coffin” that restricts near-term crude oil prices.
“Once we are out of the winter season…we should see better data and better demand on the back of a global synchronized growth,” Lennox said.
Lennox expects oil prices will improve around the mid-to-end of the second quarter upon completion of the US refinery maintenance season. For late 2018, Lennox forecasts US light, sweet crude oil will range $70-80/bbl and Brent will range $74-84/bbl.
Energy prices
The March light, sweet crude contract on the New York Mercantile Exchange gained 74¢ on Feb. 15 to settle at $61.34/bbl. The April contract rose 66¢ to $61.17/bbl.
The NYMEX natural gas price for March fell less than a penny to a rounded $2.58/MMbtu. The Henry Hub cash gas price dropped 2¢ to $2.49/MMbtu.
Ultralow-sulfur diesel for March increased by less than 1¢ to a rounded $1.89/gal. The NYMEX reformulated gasoline blendstock for March gained 2¢ to a rounded $1.73/gal.
Brent crude oil for April settled down by 3¢ to $64.33/bbl on London’s ICE. The May contract was down by 2¢ to $64/bbl. The gas oil contract for March was $557.25/tonne, up $7.25.
OPEC’s basket of crudes was $62.09/bbl on Feb. 15, up $2.07.
Contact Paula Dittrick at [email protected].
