MARKET WATCH: NYMEX oil prices rise but analysts advise caution

US light, sweet crude oil prices climbed on the New York market Apr. 10 but analysts warned that market fundamentals still lack a strong trend that would indicate a near-term oil-price recovery.

Barclays Capital Inc. issued a research note saying oil supply-demand dynamics show “a high degree of divergence, rather than a strong trend.”

In an Apr. 13 oil market outlook, Barclays analysts Miswin Mahesh of London and Michael Cohen of New York said they do not expect to see tightening supply-demand balances during the second quarter.

Instead, they expect surplus oil supplies will continue increasing with Brent prices expected to average $47/bbl and US light, sweet crude prices expected to average $39/bbl during the second quarter.

Commerzbank said high-investor interest supports oil prices at the moment with speculative net long positions in US crude being at their highest level since August 2014, but Commerzbank analysts advised caution.

“We believe the optimism among investors via-a-vis oil is exaggerated,” Commerzbank said, adding that it sees the potential for a sharp drop in prices “at any time.”

Energy prices

The New York Mercantile Exchange May crude oil contract rose 85¢ on Apr. 10 to $51.64/bbl. The June contract climbed $1.02 to $53.51/bbl.

The natural gas contract for May dropped 1.7¢ to a rounded $2.51/MMbtu. The Henry Hub, La., gas price on Apr. 9 was down 8¢ to $2.55/MMbtu.

Heating oil for May delivery rose nearly 4¢ to a rounded $1.77/gal. The price for reformulated gasoline stock for oxygenates blending for May was up nearly 5¢ to a rounded $1.81/gal.

The May ICE contract for Brent crude climbed by $1.30 to $57.87/bbl, while the June contract was up by $1.26 to $58.95/bbl. The ICE gas oil contract for April held steady at $528.25/tonne while the May contract rose $12.25 to $538.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $54.04/bbl on Apr. 10, up 52¢.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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