MARKET WATCH: NYMEX oil drops below $46/bbl, Brent below $50/bbl

The light, sweet crude oil price for September delivery dropped $1.95 Aug. 3 to settle at well below $46/bbl while the Brent crude oil price for September delivery fell more than $2 to settle at below $50/bbl. Analysts partially blamed plummeting crude oil on slowing China manufacturing.

The Caixin China manufacturing purchasing managers index fell to 47.8 in July from 49.4 in June, Caixin Media Co. and research firm Markit said Aug 3. A reading below 50 shows contraction.

The Caixin reading was lower than an official China government’s measure of manufacturing activity, released Aug. 1, which was 50 for July, down from 50.2 in June.

Barclays analysts in an Aug. 3 note said, “The recent decline in commodities prices is reminiscent of last year’s sharp falls, which were an indicator of much weaker than expected growth in emerging markets. Reassuringly, the recent decline seems more linked to bearish commodity supply than demand trends, though negative feedback effects of falling commodity prices into emerging markets are a risk factor that needs to be closely watched.”

Energy prices

The September crude oil contract on the New York Mercantile Exchange dropped $1.95 on Aug. 3 to settle at $45.17/bbl. The October contract was down $1.97 to $45.56/bbl.

The natural gas contract for September was up 3¢ to a rounded $2.75/MMbtu. The Henry Hub, La., gas price was down 2¢ to $2.75/MMbtu.

Heating oil for September delivery fell slightly nearly 6¢ to a rounded $1.53/gal. The price for reformulated gasoline stock for oxygenates blending for September fell nearly 10¢ to a rounded $1.67/gal.

The September ICE contract for Brent crude plummeted $2.69 to $49.52/bbl on Aug. 3. The October contract was down $2.66 to $50.19/bbl. The ICE gas oil contract for August was down $14.50 to $474.25/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Aug. 3 was $48.40/bbl, down $2.10.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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