Oil prices rose more than $1/bbl on the New York and London markets June 5 after the Organization of Petroleum Exporting Countries ended a meeting in Vienna by saying it decided to maintain its production quota at 30 million b/d.
Reaction to the OPEC meeting was muted, with markets taking a bigger cue from the continued slide in the Baker Hughes Inc. rig count, said Barclays Research Inc. analyst Miswin Mahesh. Baker Hughes reported the US rig count dropped 7 units to 868 for the week ended June 5 (OGJ Online, June 5, 2015).
In a note issued after the meeting, OPEC said delegates “resolved to maintain the 30 million b/d ceiling and urged member countries to adhere to it.”
World oil supplies “lie well above the 5-year average in terms of absolute volumes, indicating that the market is comfortably supplied," OPEC said.
“Member countries, in agreeing to this decision, confirmed their commitment to a stable and balanced oil market, with prices at levels that are suitable for both producers and consumers,” OPEC said, although it did not specify a price.
Iran Oil Minister Bijan Zanganeh told Platts that there was no official discussion about price, but most cartel members believed $75/bbl was reasonable. He also said OPEC should prepare to accommodate a full return of Iranian oil to markets.
“We will return to the market [when] the sanctions will be lifted,” Zanganeh told Platts after the meeting ended in Vienna. No OPEC agreement will be needed for that, he said. June 30 is the deadline for an agreement between other countries and Iran regarding Iran’s nuclear program.
An agreement could pave the way for the lifting of Western sanctions on Iranian oil.
The natural gas contract for July dropped 3.6¢ to a rounded $2.59/MMbtu. The Henry Hub, La., gas price declined 3¢ to $2.56/MMbtu.
Heating oil for July was up 2.6¢ to a rounded $1.87/gal. The price for reformulated gasoline stock for oxygenates blending for July gained 5¢ to a rounded $2.03/gal.
The July ICE contract for Brent crude increased $1.28 to $63.31/bbl while the August contract gained $1.31 to $64/bbl. The ICE gas oil contract for June was down 25¢ to $566.75/tonne.
The average price for OPEC’s basket of 12 benchmark crudes for June 5 was $58.61/bbl, down $1.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.