Crude oil prices slumped on New York and London markets on May 7, with US light, sweet crude oil for June delivery recording its biggest drop in a month. The closing price was down nearly $2/bbl, and the slump came 1 day after a decline in the oil inventory prompted a sharp oil price rally.
Crude oil prices were up and down in early May 8 trading while analysts and traders awaited a US job report, which they expected would sway the near-term direction of the dollar. Oil is traded in US dollars, and currency shifts influence decisions by oil buyers using foreign currency. A weak jobs report could weaken the dollar, encouraging oil buyers, analysts said.
Brent crude oil prices dropped by more than $2/bbl on May 7 to hover in the $65-66/bbl range. Morgan Stanley analysts said they expect continued price volatility this year. Looking ahead, Morgan Stanley forecast Brent crude oil will average $72/bbl in 2016 and $85/bbl in 2017.
The natural gas contract for June was down 4¢ to a rounded $2.73/MMbtu. The Henry Hub, La., gas price was $2.78/MMbtu, up 3¢.
Heating oil for June rose fell 5¢ to a rounded $1.96/gal on May 7. The price for reformulated gasoline stock for oxygenates blending for June decreased 4.6¢ to a rounded $1.99/gal.
The June ICE contract for Brent crude plunged $2.23 to $65.54/bbl, while the July contract slumped $2.24 to $66.23/bbl. The ICE gas oil contract for June was down $15.25 to $604.75/tonne.
The average price for the OPEC’s basket of 12 benchmark crudes for May 7 was $63.98/bbl, down 98¢.
Contact Paula Dittrick at email@example.com.
*Paual Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.