Traders attributed the Sept. 11 dropping prices to an unexpected climb in the estimated US crude oil and product supply.
The US Energy Information Administration estimated commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased 2.6 million bbl for the week ended Sept. 4 compared with the previous week.
The latest total was 458 million bbl, the Petroleum Status Report said.
Oil prices were retreating in Sept. 11 trading as normal pending the weekly rig count from Baker Hughes Inc.
In addition, crude oil prices lost momentum Sept. 11 upon reports Saudi Arabia refused Venezuela’s request for an emergency meeting of members of the Organization of Petroleum Exporting Countries.
OPEC’s next regular meeting is scheduled for December.
Goldman Sachs lowered its forecasts for US light, sweet oil futures prices, citing world oil oversupply.
The revised Goldman Sachs forecast said NYMEX light, sweet crude could fall to $38/bbl during October. In a medium-term forecast, analysts said they expect $45/bbl by Dec. 31, 2016.
Oil prices “will be lower for even longer,” Goldman Sachs analysts said. “The oil market is even more oversupplied than we had expected.”
The International Energy Agency issued its monthly Oil Market Report saying US and other non-OPEC producers could be forced into the largest production cuts since the early 1990s.
The IEA forecast that tight US oil supply will drop by 400,000 bbl in 2016.
The October crude oil contract on the New York Mercantile Exchange gained $1.77 to $45.92/bbl on Sept. 10 while the November crude oil contract was up $1.64 to $46.44/bbl. Those gains appeared to be getting erased in early Sept. 11 trading.
The natural gas contract for October rose 3¢ on Sept. 10 to a rounded $2.68/MMbtu. The Henry Hub, La., gas price was down 2¢ to $2.71/MMbtu.
Heating oil for October delivery gained 3.6¢ to a rounded $1.57/gal. The price for reformulated gasoline stock for oxygenates blending for October was up 3.4¢ to a rounded $1.39/gal.
The October ICE contract for Brent crude increased $1.31 to $48.89/bbl, and the November contract was up $1.33 to $49.85/bbl. The ICE gas oil contract for September held steady at $472.50/tonne.
The average price for the OPEC basket of 12 benchmark crudes dropped $1.13 to $44.83/bbl on Sept. 10.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.