MARKET WATCH: NYMEX, Brent oil prices slump in continued volatility

Crude oil prices slumped on New York and London markets on May 7, with US light, sweet crude oil for June delivery recording its biggest drop in a month. The closing price was down nearly $2/bbl, and the slump came 1 day after a decline in the oil inventory prompted a sharp oil price rally.

Crude oil prices were up and down in early May 8 trading while analysts and traders awaited a US job report, which they expected would sway the near-term direction of the dollar. Oil is traded in US dollars, and currency shifts influence decisions by oil buyers using foreign currency. A weak jobs report could weaken the dollar, encouraging oil buyers, analysts said.

Brent crude oil prices dropped by more than $2/bbl on May 7 to hover in the $65-66/bbl range. Morgan Stanley analysts said they expect continued price volatility this year. Looking ahead, Morgan Stanley forecast Brent crude oil will average $72/bbl in 2016 and $85/bbl in 2017.

Energy prices

The June crude oil contract on the New York Exchange June crude oil contract settled at $58.94/bbl, down $1.99 on May 7. The July contract for NYMEX oil settled at $59.92/bbl, down $2.08.

The natural gas contract for June was down 4¢ to a rounded $2.73/MMbtu. The Henry Hub, La., gas price was $2.78/MMbtu, up 3¢.

Heating oil for June rose fell 5¢ to a rounded $1.96/gal on May 7. The price for reformulated gasoline stock for oxygenates blending for June decreased 4.6¢ to a rounded $1.99/gal.

The June ICE contract for Brent crude plunged $2.23 to $65.54/bbl, while the July contract slumped $2.24 to $66.23/bbl. The ICE gas oil contract for June was down $15.25 to $604.75/tonne.

The average price for the OPEC’s basket of 12 benchmark crudes for May 7 was $63.98/bbl, down 98¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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