Crude oil prices for December delivery rebounded on the New York market by $1/bbl on Nov. 16 to settle at $41.74/bbl, but then plunged to near $40/bbl in early Nov. 17 trading, which analysts attributed to a stronger dollar and concerns about lingering ample world oil supplies.
Raymond James & Associates Inc. issued a Nov. 16 note saying the attacks in Paris carry minimal relevance for oil demand.
“There may be a small negative effect on European demand if border controls end up reducing intra-EU travel,” RJA analyst Darren Horowitz said. “The more critical question is whether the attacks will spur a robust military response against the co-called Islamic State, and whether such a response will lead to oil supply disruptions.”
Horowitz noted Syria never was a significant oil producer. France launched airstrikes against Islamic State’s stronghold in Syria a day after French President François Hollande vowed a “merciless” response to the attacks on Paris.
The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, rose 0.1% on Nov. 17. Many believe Federal Reserve officials will decide at a December meeting to raise interest rates.
Oil trades in dollars so a strengthening dollar makes oil more expensive for holders of other currencies.
The NYMEX natural gas contract for December gained 2.4¢ to a rounded $2.39/MMbtu. The Henry Hub gas price was up 13¢ at $2.14/MMbtu.
Heating oil for December delivery gained a fraction of a penny to a rounded $1.39/gal. The price for reformulated gasoline stock for oxygenates blending for December dropped a fraction of a penny to remain at a rounded $1.24/gal.
The January ICE contract for Brent crude increased 9¢ to $44.56/bbl. The February contract was up by 15¢ to $45.45/bbl. The ICE gas oil contract for December closed at $415/tonne, down $11.25.
The average price for the OPEC basket of 12 benchmark crudes for Nov. 16 was $38.18/bbl, down $1.03.
Contact Paula Dittrick at firstname.lastname@example.org.
Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.