MARKET WATCH: NYMEX crude oil ends 2017 above $60/bbl
Light, sweet crude oil on the New York market broke above $60/bbl on Dec. 29 to settle at its highest level since June 3015.
Light, sweet crude oil on the New York market broke above $60/bbl on Dec. 29 to settle at its highest level since June 3015. The Brent contract for March settled just under $67/bbl on the London market.
Dwindling US crude inventories supported crude prices, as did a weekly report of lower US production.
The US Energy Information Administration reported crude supplies fell by 4.6 million for the week ended Dec. 22, 2017, to the lowest level since October 2015. It was the sixth consecutive weekly decline.
The estimated total for US crude inventories, excluding the Strategic Petroleum Reserve, was 431.9 million bbl (OGJ Online, Dec. 28, 2017).
EIA data also showed US oil production declined by 35,000 b/d for the week ended Dec. 22 from a record high set the previous week.
Ole Hansen, Saxo Bank head of commodity strategy, said, “Crude oil starts 2018 on a firm footing, but risks lie ahead.” He said the biggest risks include US shale production and world economic performance, particularly in China.
“Apart from multiple supply disruptions since October , crude oil has also found support in falling US inventories,” Hansen said.
But he also notes crude oil supplies typically have a seasonal recovery during January through March due to a slowdown in refining.
He expects Brent likely will trade in a range of $50-60/bbl during 2018, with December prices being closer to $60/bbl. He expects light, sweet crude oil futures will end the year at $57/bbl.
In November 2017, the Organization of Petroleum Exporting Countries and some other major producers outside the cartel, including Russia, agreed to extend production-cut targets through 2018.
The original deal, struck in late 2016, helped reduce world oil levels and supported crude prices.
The February 2018 light, sweet crude contract on the New York Mercantile Exchange gained 58¢ on Dec. 29 to $60.42/bbl. The March contract increased 57¢ to $60.44/bbl.
The NYMEX natural gas price for February 2018 climbed nearly 4¢ to a rounded $2.95/MMbtu. The Henry Hub cash gas price was $3.58, up 61¢.
Ultralow-sulfur diesel for January 2018 gained 2¢ to a rounded $2.075/gal, which was a 2-year high closing. Analysts attributed that price increase to frigid temperature forecasts.
The NYMEX reformulated gasoline blendstock for January 2018 rose less than a penny to a rounded $1.80/gal.
The Brent crude contract for March 2018 on London’s ICE climbed 71¢ to $66.87/bbl. The April 2018 contract gained 67¢ to $66.44.
The gas oil contract for January was $600.25/tonne. OPEC’s basket of crudes was $64.47 on Dec. 29, up 30¢.
Contact Paula Dittrick at firstname.lastname@example.org.