MARKET WATCH: NYMEX oil price drops again in volatile trading

Light, sweet crude prices for January dropped more than $1.80 to settle at $35.52/bbl on the New York market Dec. 16 as the dollar strengthened after the US Federal Reserve confirmed it would raise interest rates as had been expected.

Oil trades in dollars so a stronger dollar makes oil more expensive for buyers using other currencies. The Wall Street Journal Dollar Index was up 0.4% early Dec. 17.

Meanwhile, US crude supplies experienced another build contrary to what analysts had anticipated. The Energy Information Administration estimated US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 4.8 million bbl for the week ended Dec. 11 compared with the previous week. The latest Petroleum Status Report listed oil supplies at a total of 490.7 million bbl.

Commerzbank issued a note saying oil inventories typically decline at this time of the year because of increased heating demand, but this winter’s mild weather so far has failed to trigger the usual heating demand for this time of year.

Regarding natural gas supplies in underground storage across the Lower 48, EIA estimated levels at 3.846 tcf as of Dec. 11, which was a net decline of 34 bcf from the previous week.

Stocks were 541 bcf higher than last year at this time and 322 bcf above the 5-year average of 3.524 tcf, the Gas Storage Report said.

Energy prices

The January crude oil contract on the New York Mercantile Exchange dropped $1.83 to settle Dec. 16 at $35.52/bbl. The February contract was down $1.76 to settle at $36.75/bbl.

The NYMEX natural gas contract for January fell 3¢ to a rounded $1.79/MMbtu. The Henry Hub gas price was $1.68/MMbtu on Dec. 16, up 3¢.

Heating oil for January delivery declined 3.4¢ to a rounded $1.11/gal. The price for reformulated gasoline stock for oxygenates blending for January was down 1¢ to a rounded $1.23/gal.

The January ICE contract for Brent crude dropped $1.26 to $37.19/bbl, and the February contract was down $1.34 to $37.39/bbl. The ICE gas oil contract for January was $337.50/tonne on Dec. 16, down $8.25.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Dec. 16 was $32.33/bbl, down 28¢.

Contact Paula Dittrick at

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