Light, sweet crude oil prices for November delivery regained some strength in late Oct. 2 trading, settling back above $45/bbl after Baker Hughes Inc. reported the number of active US drilling rigs dropped to the lowest level in years.
The overall drilling rig count plunged 29 units during the week ended Oct. 2 to a total of 809—the lowest since May 3, 2002, according to Baker Hughes data (OGJ Online, Oct. 2, 2015).
Separately, analysts and traders kept watching the forecast regarding Hurricane Joaquin, which had raised concerns about potential disruptions to East Coast refining. But the National Hurricane Center said Oct. 2 that the threat of a direct hit to the East Coast appeared to be easing.
On world oil markets, Saudi Arabia announced price reductions for Saudi oil delivered to Asia. Members of the Organization of Petroleum Exporting Countries are competing among themselves for market share in Asia.
During September, Iran, Iraq, and other Middle Eastern countries made deeper cuts in their official prices than Saudi Arabia.
On Oct. 4, Saudi Aramco cut the price of its light crude deliveries to Asia by $1.70/bbl and cut its price for heavy oil to Asia by $2/bbl. It also cut its price for heavy oil for US delivery by 30¢/bbl.
Seth Kleinman, managing director for Citi Group, told a Genscape oil and gas conference in Houston on Sept. 30 that Aramco was expected to cut its prices for oil going to Asia.
“Thanks to shale, Asia is really the only energy short left,” Kleinman said, adding OPEC members all are trying to push their crude toward Asia. “Asian market share is the only game in town.”
The natural gas contract for November rose 1.8¢ to a rounded $2.45/MMbtu. The Henry Hub, La., gas price fell 11¢ to $2.26/MMbtu.
Heating oil for November delivery edged up a fraction of a penny to remain at a rounded $1.52/gal. The price for reformulated gasoline stock for oxygenates blending for November was down 2.5¢ to a rounded $1.34/gal.
The November ICE contract for Brent crude rose 44¢ to $48.13/bbl, and the December contract increased 41¢ to settle at $48.79/bbl. ICE gas oil for October settled at $452.25/tonne, down $13.50.
The average price for the OPEC basket of 12 benchmark crudes was $44/bbl on Oct. 2, down 66¢ from the previous day.
Contact Paula Dittrick at firstname.lastname@example.org.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.