Oil prices on the New York market settled Jan. 2 below $53/bbl, marking the lowest closing price in more than 5 years, while Brent for February delivery dropped below $57/bbl on the London market on reports of increased production from Russia and increased exports from Iraq.
Russian production rose 0.3% in December to 10.67 million b/d, according to preliminary statistics that Bloomberg received from CDU-TEK, part of the Russia Energy Ministry. The output last month was still well below Russia’s peak production of more than 11.4 million b/d in 1988.
Separately, Iraq exported an average 2.94 million b/d for a total of 91.14 million bbl during December, which was the country’s highest export level since the 1980s, the Iraqi Oil Ministry said.
In Libya, firefights have extinguished a blaze to crude oil storage tanks at the port of Es Sider, where a blaze ignited Dec. 25, 2014.
The fire damaged seven tanks and destroyed an estimated 1.8 million bbl of oil at Es Sider, Libya’s main crude oil export terminal. Rockets reportedly blasted through the port during a conflict between the Tripoli government and Islamist militants. Both sides have blamed the other for causing the fire.
Meanwhile, the US dollar gained in strength against most currencies on widespread anticipation that the Federal Reserve will raise interest rates this year. Oil trades in dollars, and a stronger dollar makes oil more expensive to buy with other currencies.
The New York Mercantile Exchange February crude oil contract fell 58¢ on Jan. 2, closing at $52.69/bbl. That was the front-month contract’s lowest price since April 2009. The March contract dropped 59¢ to $53.11/bbl.
The natural gas contract for February settled up 11¢ to a rounded $3/MMbtu. The cash gas price at Henry Hub, La., dropped 1¢ to $2.99/MMbtu on Jan. 2.
Heating oil for February delivery was down 3.8¢ to a rounded $1.80/gal. Reformulated gasoline stock for oxygenate blending for February declined by 3.87¢ to a rounded $1.43/gal, marking RBOB’s lowest settlement since April 2009.
The February ICE contract for Brent crude oil was down 91¢ to $56.42/bbl, the lowest level since May 2009. The March contract was down 95¢ to $57.26/bbl.
The ICE gas oil contract for January rose $7 to $519.25/tonne.
The average price for OPEC’s basket of 12 benchmark crudes on Jan. 2 was $51.91/bbl, down 9¢ from Dec. 31, 2014.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.