MARKET WATCH: NYMEX, Brent crude oil prices falling on rig count, ample supply

Light, sweet crude oil prices each dropped more than $1/bbl in July 31 trading and continued sliding in early Aug. 3 trading after a weekly US rig count showed another gain in rigs targeting oil for the week ended July 31, renewing concerns that ample world oil supplies is likely to continue.

Baker Hughes Inc. said that since the week ended June 26, the oil-directed count has added 36 rigs. As of July 31, Baker Hughes reported a total of 664 oil-directed rigs operating, and the total is still down 909 rigs compared with the same period a year ago (OGJ Online, July 31, 2015).

Separately, Deutsche Bank analysts said, “US producers are coming to the point where they start considering growth, at least at the margin.”

Meanwhile, Barclays said no slowdown was found in a group of 101 oil companies that it tracks. That group covers about 40% of world oil production.

IHS Energy noted world oil production has gone up, not down, since the oil price collapse.

“Oil markets are increasingly glutted,” IHS said in an analysis of crude oil prices released July 31. “Prices have not yet fallen far enough or for long enough for an appreciable US supply adjustment to occur. But it may not be far off, especially if oil prices fall further with additional Iranian supplies.”

Energy prices

The September crude oil contract on the New York Mercantile Exchange dipped $1.40 on July 31 to settle at $47.12/bbl. The October contract was down $1.38 to $47.53/bbl.

The natural gas contract for September was down 5¢ to a rounded $2.72/MMbtu. The Henry Hub, La., gas price was down 8¢ to $2.77/MMbtu.

Heating oil for August delivery fell slightly more than a penny to at a rounded $1.58/gal. The price for reformulated gasoline stock for oxygenates blending for August rose by slightly more than a penny to reach a rounded $1.84/gal.

The September ICE contract for Brent crude dropped $1.10 to $52.21/bbl on July 31. The October contract was down $1.13 to $52.85/bbl. The ICE gas oil contract for August was down $5 to $488.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 31 was $50.50/bbl, down 95¢.

Contact Paula Dittrick at

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

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