Crude oil benchmarks on New York and London markets closed up by more than $1/bbl each on Jan. 3 with the momentum carrying into Jan. 4 trading as protests continued in Iran.
In early Jan. 4 trading, US light, sweet crude oil futures were up to $61.77/bbl. Brent crude reached a high of $68.27 before dropping during the Jan. 4 session in London.
The Wall Street Journal reported that $68.27/bbl for Brent was the highest level since May 2015. Antigovernment protests in Iran stem in part from disappointment that the lifting of international sanctions 2 years ago did not generate an expected economic benefit.
US President Donald Trump has criticized Iran. He has said he wants a reinstatement of US sanctions against the country. The US is expected to review temporary waivers on sanctions against Iran yet this month.
JBC Energy, a consultant, issued a note saying, “The market has taken a strong cue from the increased level of back-and-forth between Iran and the US in response to widespread proreform protests in the third-biggest OPEC crude producer over the last week.”
Meanwhile, US natural gas futures prices closed lower on Jan. 3 upon long-term forecasts for warmer weather. But analysts say gas prices are likely to spike again with freezing weather and an anticipated draw from underground gas storage.
A massive winter storm was expected to create blizzard conditions in parts of New England. Frigid temperatures in portions of the eastern US were expected by Jan. 6-7 with freezing rain or snow possible from Florida to Canada.
The US Energy Information Administration was scheduled to release its weekly oil and products inventory on Jan. 4 as well as its weekly gas storage report for underground storage across the Lower 48.
Energy prices
The February light, sweet crude contract on the New York Mercantile Exchange climbed $1.26 on Jan. 3 to $61.63/bbl. The March contract increased by $1.17 to $61.55/bbl.
The NYMEX natural gas price for February fell nearly 5¢ to a rounded $3.01/MMbtu. But spot market gas prices increased. The Henry Hub cash gas price was $3.08/MMbtu, up by 4¢.
Ultralow-sulfur diesel for February rose nearly 3¢ to a rounded $2.09/gal.
The NYMEX reformulated gasoline blendstock for February also rose by 3¢ to a rounded $1.79/gal.
The Brent crude contract for March on London’s ICE gained $1.27 to settle at $67.84/bbl on Jan. 3. The April contract added $1.16 to $67.29/bbl.
The gas oil contract for January was $606.75/tonne, up $9.75. OPEC’s basket of crudes was $65.12 on Jan. 3, up 29¢.
Contact Paula Dittrick at [email protected].
