MARKET WATCH: Crude prices seesaw after Saudi oil minister’s statement

Crude oil prices on the London and New York markets spiked early on Nov. 23 after Saudi Arabia reaffirmed plans to work with other producing nations in an effort to stabilize the oil market. However, the rise was short-lived as a strong dollar and concerns about continued oversupply yet again weighed down on the market.

“Perhaps it would be fitting here to mention the role of the kingdom of Saudi Arabia in the stability of the oil market, and its continued willingness and prompt, assiduous efforts to cooperate with all oil producing and exporting countries, both from within and outside [the Organization of Petroleum Exporting Countries], in order to maintain market and price stability,” stated Saudi Arabia’s Minister of Petroleum and Mineral Resources Ali bin Ibrahim Al-Naimi during the Seminar on Future of Energy in the Middle East and North Africa in Bahrain.

OPEC production in October dropped 256,000 b/d to average 31.38 million b/d, according to secondary sources in the organization’s November oil market report (OGJ Online, Nov. 12, 2015). Crude output during that month decreased mostly in Iraq, Saudi Arabia, and Kuwait, while production in Libya showed an increase.

Energy prices

The December crude oil contract on the New York Mercantile Exchange dropped 15¢ on Nov. 20 to $40.39/bbl. The January crude oil contract gained 18¢ to $41.90/bbl.

The NYMEX natural gas contract for December lost 13.1¢ to a rounded $2.15/MMbtu. The Henry Hub gas price on Nov. 20 was $2.15/MMbtu, edging up 1¢.

Heating oil for December delivery was virtually unchanged at a rounded $1.37/gal. The price for reformulated gasoline stock for oxygenates blending for December was also virtually the same as Nov. 20’s price at $1.29/gal.

The January ICE contract for Brent crude gained 48¢ to $44.66/bbl. The February contract rose 43¢ to $45.43/bbl. The ICE gas oil contract for December closed at $424.75/tonne, up $2.25.

The average price for the OPEC basket of 12 benchmark crudes for Nov. 20 was $38.37/bbl, down 15¢.

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