A weakening US dollar supported light, sweet crude oil prices on the New York market Dec. 3 with the January contract gaining more than $1/bbl to settle at $41.08/bbl following a volatile week for oil prices ahead of a scheduled meeting Dec. 4 in Vienna of members of the Organization of Petroleum Exporting Countries.
The dollar fell sharply against other major currencies after the European Central Bank announced smaller stimulus steps than some investors and economists anticipated.
Meanwhile, OPEC delegates gathered for a policy meeting even as OPEC staff suggested that oil prices likely will remain low well into 2016 regardless of what OPEC decides to do about production levels.
At that meeting, OPEC members decided to accommodate current production levels, which are more than 1 million b/d over the cartel’s current production quota. The group offered no specific numbers for a production ceiling or for its actual production. Most analysts peg OPEC’s actual production at about 31.2 million b/d. The group will next meet in June.
The Wall Street Journal reported during November that an analysis document WSJ obtained from the OPEC Economic Commission Board indicated world oil supplies will cap any upside potential for oil prices for months to come.
Separately, Venezuela led a group of countries pushing for a 5% production cut among OPEC members. Venezuela’s Oil Minister Eulogio Del Pino said prices could fall another $20/bbl unless OPEC trims its production.“The overproduction we have from OPEC is going to produce a catastrophe in the price,” Del Pino told reporters in Vienna before the meeting.
Most analysts had expected OPEC to maintain its production quota at 30 million b/d—a target that OPEC members routinely exceed (OGJ Online, Dec. 3, 2015).
The NYMEX natural gas contract for January gained 1.6¢ to a rounded $2.18/MMbtu. The Henry Hub gas price was $2.11/MMbtu on Dec. 3, down 6¢.
Heating oil for January delivery climbed 5.4¢ to a rounded $1.36/gal. The price for reformulated gasoline stock for oxygenates blending for January was up less than a penny to a rounded $1.30/gal.
The January ICE contract for Brent crude gained $1.35 to $43.84/bbl, and the February contract was up $1.27 to $44.43/bbl. The ICE gas oil contract for December closed at $395.25/tonne on Dec. 3, up $2.25.
The average price for OPEC’s basket of 12 benchmark crudes for Dec. 3 was $37.89/bbl, down 55¢.
Contact Paula Dittrick at firstname.lastname@example.org.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.