MARKET WATCH: NYMEX crude for November settles above $76/bbl
Crude oil prices on both the New York and London markets jumped by more than $1/bbl Oct. 3. Traders appeared more focused on declining Iranian oil exports than a sharp build in US inventories.
The US Energy Information Administration said US crude oil inventories, excluding the Strategic Petroleum Reserve, increased by 8 million bbl for the week ended Sept. 28 to 404 million bbl (OGJ Online, Oct. 3, 2018).
US crude oil inventories are at the 5-year average for this time of year, EIA said in the Petroleum Status Report. US crude oil production held unchanged at 11.1 million b/d for last week compared with the previous week.
Typically, crude oil prices fall with a rise in US oil supply. But light, sweet crude oil settled above $76/bbl. Oil market participants are considering future world oil supply levels given a couple supply constraints.
Full implementation of US oil sanctions against Iran are scheduled for early November. Venezuela oil production also continues to fall.
Saudi Arabia and Russia are expected to fill some of the gap caused by falling Iranian exports. Of the Organization of Petroleum Exporting Countries, analysts believe Saudi Arabia has the highest spare capacity.
“Saudi Arabia has failed to calm the speculative anxiety in the market,” said Olivier Jakob of Petromatrix.
US Secretary Mike Pompeo on Oct. 2 announced a US termination of the 1955 Treaty of Amity, its economic agreement with Iran.
Energy prices
The light, sweet crude contract for November delivery on the New York Mercantile Exchange jumped $1.18 to $76.41/bbl on Oct. 3. The December contract gained $1.20 to settle at $75.24/bbl.
The NYMEX natural gas price for November was up by a rounded 6¢ to a rounded $3.23/MMbtu. The Henry Hub cash gas was unavailable.
Ultralow-sulfur diesel for November rose nearly 3¢ to a rounded $2.44/gal. The NYMEX reformulated gasoline blendstock for November increased 1¢ to settle at a rounded $2.14/gal.
Brent crude oil for December gained $1.49 to $86.29/bbl on London’s International Commodity Exchange. The January contract climbed $1.48 to $85.83/bbl. The gas oil contract for October held unchanged at $740.75/tonne.
OPEC’s basket of crudes for Oct. 3 averaged $83.64/bbl, up 36¢.
Contact Paula Dittrick at [email protected]
About the Author
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.