MARKET WATCH: NYMEX oil prices drop slightly pending OPEC meeting

US light, sweet crude oil prices for July delivery declined slightly in June 1 trading on the New York market pending a June 5 meeting of the Organization of Petroleum Exporting Countries in Vienna at which the cartel generally is expected to maintain its production quota of 30 million b/d.

Olivier Jakob, analyst at Petromatrix, suggested OPEC might increase its target to 30.5 million b/d, which would be closer to his estimated OPEC current production levels.

Saudi Oil Minister Ali al-Naimi arrived in Vienna on June 1 where he told reporters that the growth pace of global oil supplies appears to be slowing although he acknowledged surplus inventory still exists.

Separately, China’s official Purchasing Managers Index for May registered at 50.2, which was below analysts’ projections. The May index marked a 6-month high, but the government said industry still faces multiple strains.

The latest PMI was released June 1 by the National Bureau of Statistics, marking a third consecutive month of expansion. Any figure above 50 indicates economic growth, analysts said.

Energy prices

The July crude oil contract on the New York Mercantile Exchange dropped 10¢ on June 1 to settle at $60.20/bbl. The August contract fell 12¢ to settle at $60.48/bbl.

The natural gas contract for July gained less than a penny to edge up to a rounded $2.65/MMbtu. The Henry Hub, La., gas price dropped 4¢ to $2.60/MMbtu.

Heating oil for July was down 2.3¢ to a rounded $1.93/gal. The price for reformulated gasoline stock for oxygenates blending for July fell 2¢ to a rounded $2.04/gal.

The July ICE contract for Brent crude dropped 68¢ to $64.88/bbl while the August contract fell 63¢ to $65.51/bbl. The ICE gas oil contract for June was down $3.25 to $589.75/tonne.

The average price for OPEC’s basket of 12 benchmark crudes for June 1 was $60.39/bbl, down 8¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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