MARKET: NYMEX crude oil prices drops below $51/bbl

Light, sweet crude oil prices for August delivery dropped modestly to settle at just under $51/bbl on the New York July 16, but Brent crude oil August prices rose on the London market on reports of a power outage at the UK North Sea Buzzard oil field.

News reports indicated the field was down on July 16 but expected to resume full operations July 17. Power problems were reported on the night of July 15.

Analysts said that early trading on July 17 appeared to be more influenced by the strength of the dollar than by concerns about the Greek debt crisis or the possibility of more crude oil coming from Iran, providing a tentative agreement on Iran’s nuclear program wins approval and sanctions are lifted.

US President Barack Obama was scheduled to meet July 17 with Saudi Arabia’s Foreign Minister Adel al-Jubeir in Washington, DC, to discuss the Iranian deal, a White House official told the Wall Street Journal. It was to be Obama’s first meeting with a key American ally from an Arab state since reaching the Iran deal on July 14.

Separately, Germany’s lower house of parliament voted July 17 to give its government the mandate to participate in formal negotiations about a 3-year Greek bailout. German Chancellor Angela Merkel will have to call on parliament again to ratify an actual bailout deal of as much as €86 billion.

In their vote, German lawmakers also supported short-term financing from a European Union bailout fund to help Greece make payments to the European Central Bank and the International Monetary Fund.

Energy prices

The August crude oil contract on the New York Mercantile Exchange dropped 50¢ on July 16 to settle at $50.91/bbl, which was the lowest settlement since Apr. 9. The September contract dropped 55¢ to $51.24/bbl.

The natural gas contract for August was down 6¢ to a rounded $2.86/MMbtu. The Henry Hub, La., gas price was $2.90/MMbtu, down 2¢.

Heating oil for August dropped less than a penny to remain at a rounded $1.67/gal. The price for reformulated gasoline stock for oxygenates blending for August rose by nearly 4¢ to a rounded $1.90/gal.

The August ICE contract for Brent crude increased 46¢ to $57.51/bbl on July 16, and the August contract expired with the July 16 settlement. The September contract was down 20¢ to $56.92/bbl. The ICE gas oil contract for August fell $3.75 to $519.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 16 was not immediately available.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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