Crude oil prices continued their recent upward momentum on the New York and London markets Apr. 13 on expectations that US oil production might start falling in coming weeks, although analysts suggested the anticipated drop will not be enough to balance an oversupplied world oil market.
Paul Horsnell, head of commodity research at Standard Chartered, said he believes the growth pace of US shale production already is starting to fall. Unconventional plays have contributed heavily to ample oil inventory levels, which have pushed down oil prices since 2014.
“Current rig counts imply that the month-on-month decline will exceed 70,000 b/d by June,” Horsnell said in a report.
Separately, the US Energy Information Administration said Apr. 13 that it expects US total oil output from seven shale plays will decline 57,000 b/d during May compared with April, which would be the first drop since the agency started issuing monthly drilling productivity reports during 2013.
The natural gas contract for May held steady at $2.51/MMbtu while the June contract fell 1¢ to a rounded $2.55/MMbtu. The Henry Hub, La., gas price on Apr. 13 was up 1¢ to $2.56/MMbtu.
Heating oil for May delivery rose 1.7¢ to a rounded $1.78/gal. The price for reformulated gasoline stock for oxygenates blending for May was down less than a penny to a rounded $1.80/gal.
The May ICE contract for Brent crude climbed 6¢ to $57.93/bbl, while the June contract was up 9¢ to $59.04/bbl. The ICE gas oil contract for May rose $4 to $542.75/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $55.86/bbl on Apr. 13, up $1.82.
Contact Paula Dittrick at firstname.lastname@example.org.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.