MARKET WATCH: NYMEX oil prices jump on lower rig count

US light, sweet crude oil prices for July delivery jumped in May 29 trading on the New York market to settle more than $2/bbl higher after Baker Hughes Inc. reported another drop in the US rig count, which analysts and traders took as a sign that oil production will slow.

The US drilling rig count dropped 10 units during the week ended May 29 to settle at 875 rigs working (OGJ Online, May 29, 2015).

The rig count has now declined in 25 consecutive weeks, during which time it has plunged 1,045 units (OGJ Online, Dec. 5, 2014). Compared with the same period a year ago, the count was down 991 units.

On the world oil market, traders await a June 5 meeting of the Organization of Petroleum Exporting Countries in Vienna. Most analysts expect OPEC will maintain its production target of 30 million b/d, which would continue the cartel’s strategy set at its November 2014 meeting.

Energy prices

The July crude oil contract on the New York Mercantile Exchange soared $2.62 on May 29 to settle at $60.30/bbl. The August contract jumped $2.58 to settle at $60.60/bbl.

The natural gas contract for July declined 6.4¢ to a rounded $2.64/MMbtu. The Henry Hub, La., gas price dropped 13¢ to $2.64/MMbtu.

Heating oil for June was up 8¢ to a rounded $1.95/gal. The price for reformulated gasoline stock for oxygenates blending for June climbed 10¢ to a rounded $2.08/gal.

The July ICE contract for Brent crude jumped $2.98 to $65.56/bbl while the August contract rose $2.98 to $66.14/bbl. The ICE gas oil contract for June was up $22.25 to $593/tonne.

The average price for OPEC’s basket of 12 benchmark crudes for May 29 was $60.47/bbl, up $1.14.

Contact Paula Dittrick at

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

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