MARKET WATCH: Crude prices drop on Iran’s plans to follow nuclear accord

Crude oil prices dropped modestly on the New York and London markets on Jan. 13 following reports that Iran plans this month to begin ending its nuclear program, which analysts said triggered concerns that Iran potentially could add more crude oil to already well-supplied world oil markets.

Representatives of the five permanent members of the United Nations Security Council and Germany agreed with Iranian representatives on Jan. 12 that Iran would begin implementing a nuclear accord on Jan. 20. The countries signed a pact late in 2012 (OGJ Online, Nov. 26, 2012).

Terms call for Iran to stop producing near-weapons grade nuclear fuel and start curtailing other nuclear work.

Meanwhile, US natural gas prices jumped on both futures and cash markets, which analysts attributed to weather forecasts calling for a return of cold weather later this month.

PIRA Energy Group of New York said in a weekly recap note that US Midcontinent crude oil fundamentals strengthened late last year.

“Crude oil fundamentals improved throughout the Midcontinent in December, with stocks declining at least modestly,” in Oklahoma, West Texas, the Rockies, Western Canada, and the Gulf Coast, PIRA said.

Energy prices

The New York Mercantile Exchange February crude contract was down 92¢ on Jan. 13, closing at $91.80/bbl. The March contract dropped 94¢ to settle at $92.01/bbl.

Heating oil for February delivery edged down less than a penny to a rounded $2.93/gal. Reformulated gasoline stock for oxygenate blending for February delivery declined 3.5¢, settling at a rounded $2.63/gal.

The February natural gas contract on NYMEX escalated 22.1¢ to settle at a rounded $4.27/MMbtu. The gain marked the commodity’s largest single-day gain since June 14, 2012.

On the US spot market, the Jan. 13 gas price at Henry Hub also jumped, climbing by 21.4¢ to a rounded $4.18/MMbtu.

In London, the February ICE contract for Brent crude oil was down 50¢, closing at $106.75/bbl. The March Brent contract dropped 64¢ to settle at $105.97/bbl. The ICE gas oil contract for February was up $7.50 to $907/tonne.

The Organizational of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $103.99/bbl on Jan. 13, down 17¢.

Contact Paula Dittrick at

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