MARKET WATCH: NYMEX oil prices rally somewhat after lower rig count

Light, sweet crude oil prices for December delivery demonstrated a modest rally Oct. 30 after a weekly rig count report showed fewer rigs working onshore.

The overall US drilling rig count dropped 12 units to 775 rigs working during the week ended Oct. 30, said Baker Hughes Inc. The latest total was the lowest since Apr. 26, 2002 (OGJ Online, Oct. 30, 2015).

Oil prices on the New York market finished the week up 4.5% while Brent gained 3.3% on the London market for the week ended Oct. 30, the Wall Street Journal reported.

Results of a survey of 13 banks, polled by WSJ, showed that respondents expect Brent crude will average $58/bbl and US light, sweet crude will average $54/bbl next year. Many of the same respondents said only a few months ago that they expected $70/bbl oil in 2016, WSJ said.

Analysts remain concerned about ample world oil supply when demand growth is slowing because of a weakening Chinese economy. In a research note, Barclays said Chinese oil growth weakened to 2.1% year-over-year during September.

“This slower growth is more consistent with the slowing economic activity and overall energy demand growth, while the unusual strong demand of previous months may have been related to incomplete inventory data,” Barclays said. “Fundamentals suggest moderate demand ahead, in our view.”

Energy prices

The December crude oil contract on the New York Mercantile Exchange was up 53¢ to settle at $46.59/bbl on Oct. 30. The January crude oil contract rose 57¢ to $47.47/bbl.

The NYMEX natural gas contract for December rose 6.4¢ to a rounded $2.32/MMbtu. The Henry Hub, La., gas price fell 16¢ to $1.94/MMbtu.

Heating oil for November delivery rose 2.5¢ to a rounded $1.50/gal. The price for reformulated gasoline stock for oxygenates blending for November increased 5¢ to a rounded $1.40/gal.

The December ICE contract for Brent crude was up 76¢ to $49.56/bbl. The January contract was up 72¢ to $50.31/bbl. ICE gas oil for November settled at $455.25/tonne, up $2.

The average price for the OPEC basket of 12 benchmark crudes for Oct. 30 was $43.66/bbl, down 68¢.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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