MARKET WATCH: Crude benchmarks fall after Bolton firing

Crude oil benchmarks fell in New York and London markets Sept. 10 after US President Donald Trump fired US National Security Advisor John Bolton, which at least one analyst suggests could be a move toward easing US-Iran relations.

Bolton, who was appointed in March 2018, was the leading hawk in Trump’s administration (OGJ Online, Mar. 26, 2018). The US later exited a 2015 international agreement to curb Iran’s nuclear program. In May Trump’s administration announced new sanctions against Iranian oil imports.

“In recent weeks, President Trump has signaled a willingness to meet with Iranian President Rouhani and potentially consider some form of a financial lifeline for the cash-strapped country,” said Helima Croft, RBC Capital Market global head of commodity strategy.

“The key proposal to watch is the one made by French President Emmanuel Macron to provide a $15-billion credit line, which would be backed by around 700.000 b/d of oil,” Croft said.

Sara Vakhshouri, president of SVB Energy International in Washington, DC, told OGJ that SVB Energy estimates Iran’s oil production for August was 2.28 million b/d, unchanged from July.

“Its oil export in August was about 150,000-200,000 b/d,” Vakhshouri said. “This was lower than July’s rate of 220,000-350,000 b/d.”

Vakhshouri said there is no indication that any delivered oil was in new sales because some oil deliveries, particularly to China, are part of a debt repayment contracts.

Iran has about 110,000-220,000 b/d of debt repayment with China, which imported about 100,000 b/d from Iran during August, SVB Energy estimates.

In addition, Iran also has 100,000 b/d of debt repayment with India, although India has not imported much oil from Iran since May.

“Despite the fact that Iran has delivered oil in the month of August, its oil sales have been very low,” Vakhshouri said.

Energy prices

Light, sweet crude oil on the New York Mercantile Exchange for October delivery decreased 45¢ to $57.40/bbl on Sept. 10 while the November contract fell 44¢ to $57.29/bbl.

The October natural gas price on NYMEX decreased a fraction of a penny to settle at $2.58/MMbtu on Sept. 10.

Ultralow-sulfur diesel for October increased by less than 1¢ to remain at $1.93/gal. The NYMEX reformulated gasoline blendstock for October gained less than 1¢ to a rounded $1.59/gal.

Brent crude for November fell 21¢ to $62.38/bbl. The December contract decreased 19¢ to settle at $61.44/bbl.

Gas oil for September rose $8.50 to $600.75/tonne on Sept. 10.

The average for the Organization of Petroleum Exporting Countries’ basket of crudes for Sept. 10 was $62.74/bbl, up 74¢.

Contact Paula Dittrick at pdittrick@endeavorb2b.com.