US light, sweet crude oil prices dropped slightly on the New York market Sept. 8 awaiting the weekly US government report on oil and product inventories, coming out Sept. 10, which is a day later than usual because of the Sept. 7 Labor Day holiday.
“Any lasting price recovery would require signs that the oversupply is being reduced,” Commerzbank analysts said in a report.
Commodities information provider Platts reported oil production from members of the Organization of Petroleum Exporting Countries totaled an estimated 31.26 million b/d in August, down 140,000 b/d from the July level of 31.4 million b/d.
“This is the first time OPEC output has fallen since February, but it shouldn’t be over-interpreted,” said Margaret McQuaile, Platts senior correspondent. “The August total still puts OPEC exceeding its official ceiling by 1.26 million b/d, and Saudi oil is still flowing at record levels.”
Platts made its estimate based on its survey of OPEC and oil industry representatives as well as analysts. OPEC delegates are scheduled to meet in Vienna on Dec. 4.
Analysts said concerns about the Chinese economy have driven world crude prices down in recent weeks. North Sea Brent prices for October dipped to under $43/bbl on Aug. 24, but the contract has since regained support to about $50/bbl.
On Sept. 9, equity and commodity markets got support by an announcement from China’s Ministry of Finance that it plans to initiate a “more forceful” fiscal policy to stimulate economic growth.
The natural gas contract for October climbed 5.5¢ to a rounded $2.71/MMbtu. The Henry Hub, La., gas price was $2.73 on Sept. 8 following Labor Day.
Heating oil for October delivery edged down by less than a penny to a rounded $1.59/gal. The price for reformulated gasoline stock for oxygenates blending for October was down by about 1.6¢ to a rounded $1.40/gal.
The October ICE contract for Brent crude gained $1.89 to $49.52/bbl, and the November contract was up $1.91 to $50.41/bbl. The ICE gas oil contract for September increased $10.75 to $481/tonne.
The average price for the OPEC basket of 12 benchmark crudes decreased 21¢ to $45.38/bbl on Sept. 8.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.