MARKET WATCH: NYMEX oil price falls as market’s direction ebbs

Crude oil prices for May delivery fell nearly $1/bbl on Apr. 17, ending a six-session gain on the New York market during a week that experienced the highest settlement price of the year at $56.71/bbl, which was set on Apr. 16.

Analysts said the US oil market lacked a clear direction, which they attributed to a combination of largely international factors, including turmoil in the Middle East, the Greek debt situation, and moves in the value of the dollar.

Meanwhile, US crude oil production remains robust despite a dropping rig count.

CLSA Americas LLC oil services analyst David Havens of New York said budget cuts and subsequent US production cuts are what he called “good first steps” to managing ample oil supplies.

“The evolution of US unconventional oil supplies is not going to be managed this quickly and absolutely,” he said in an Apr. 20 research note. He said “elasticity” of shale production provides “a headwind to oil prices.”

Bank of America Merrill Lynch analysts warned, “The recent run up in prices could lose steam sooner rather than later,” noting that crude oil inventories continue to build.

They forecast US light sweet crude prices at $41/bbl to end the second quarter and Brent at $48/bbl for the same time.

Energy prices

The New York Mercantile Exchange May crude oil contract dropped 97¢ on Apr. 17 to $55.74/bbl. The June contract was down 79¢ to $57.32/bbl.

The natural gas contract for May declined 5¢ to $2.63/MMbtu. The Henry Hub, La., gas price on Apr. 17 climbed 6¢ to $2.64/MMbtu.

Heating oil for May delivery rose dropped 2.6¢ to a rounded $1.88/gal. The price for reformulated gasoline stock for oxygenates blending for May was down a fraction of a penny to a rounded $1.93/gal.

The June ICE contract for Brent crude declined 53¢ to $63.45/bbl, while the July contract was down 52¢ to $62.24/bbl. The ICE gas oil contract for May rose $5.50 to $577.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $59.52/bbl on Apr. 17, up 64¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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