Light, sweet crude oil prices for November delivery plummeted to settle $2.53/bbl lower on the New York market on Oct. 12 on lingering concerns that ample world oil supplies will extend well into 2016, keeping oil prices low.
In its monthly Oil Market Report, the Organization of Petroleum Exporting Countries said on Oct. 12 that it produced 31.57 million b/d during September, which is the cartel’s highest reported level since April 2012.
The September production figure was up 109,000 b/d from August, and the latest total surpassed the OPEC production quota of 30 million b/d.
OPEC also forecast US oil production would fall next year, which would be the first US production decline since 2008. Previously, the US Energy Information Administration said US crude production would average 8.9 million b/d in 2016, down from 9.2 million b/d in 2015.
Han van Cleef, senior energy economist for ABN Amro in Amsterdam, said low oil prices are starting to have “a visible effect on US oil production.” In an Energy Monitor note for October, van Cleef said, “The main question is whether this decline will continue,” or whether it will have only a temporary effect.
The natural gas contract for November gained 3.3¢ to a rounded $2.53/MMbtu. The Henry Hub, La., gas price rose 4¢ to $2.40/MMbtu.
Heating oil for November delivery was down nearly 9¢ to rounded $1.50/gal. The price for reformulated gasoline stock for oxygenates blending for November was down a rounded 7.6¢ to a rounded $1.34/gal.
The November ICE contract for Brent crude decreased $2.79 to $49.86/bbl, and the December contract dropped $2.66 to settle at $50.25/bbl. ICE gas oil for November settled at $476.25/tonne, down $10.25.
The average price for the OPEC basket of 12 benchmark crudes was $47.97/bbl on Oct. 12, down 82¢. OPEC officials on Oct. 12 said they had revised the basket price for Oct. 9 down by 1¢ to $48.79/bbl.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.