MARKET WATCH: Brent crude oil briefly dips below $30/bbl

Crude oil prices for February delivery waffled in Jan. 13 trading with the closing for US light, sweet crude up 4¢ at $30.48/bbl on the New York market. Brent crude oil prices for February briefly dipped to a low of $29.96/bbl but ended Jan. 13 trading at $30.31/bbl, down 55¢, in London.

Brent crude for February delivery touched below $30/bbl the day after light, sweet crude prices had done so (OGJ Online, Jan. 13, 2016).

Analysts say international sanctions against Iran could be lifted as soon as this weekend, clearing the way for increased Iranian oil exports, which would add to an already oversupplied world oil market.

“The lifting of the sanctions has been widely expected, and it is difficult to say that it is not yet priced in Brent at $30/bbl,” said Olivier Jakob, analyst with Petromatrix.

The US oil inventory report showed another gain to reach a total of 482.6 million bbl for the week ended Jan. 8, the Petroleum Status Report said.

The Energy Information Administration estimated US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 200,000 bbl for the week ended Jan. 8 from the previous week.

During an interview in New York with The Wall Street Journal, Continental Resources Inc. Chief Executive Officer Harold Hamm said he expects oil prices could reach $60/bbl by Dec. 31. His forecast came at a time when many analysts are suggesting oil prices could continue sliding.

Hamm believes current US oil supplies will ease substantially because unconventional oil and gas companies are lowering production. He believes production is declining 1.6 million bbl/year.

“We’re heading toward a short supply situation unfortunately,” Hamm told the WSJ. “That’s going to get very concerning in the latter part of the year.”

Energy prices

The March crude oil contract on the New York Mercantile Exchange was down 13¢ to settle at $31.39/bbl.

The NYMEX natural gas contract for February gained 1.2¢ to a rounded $2.27/MMbtu. The Henry Hub gas price dropped 8¢ to $2.30/MMbtu on Jan. 13.

Heating oil for February delivery dropped 2¢ to 97¢/gal. The price for reformulated gasoline stock for oxygenates blending for February was down 3¢ to a rounded $1.05/gal.

The March ICE contract for Brent crude was down 67¢ to $30.28/bbl. The ICE gas oil contract was $287.50/tonne on Jan. 13, down $5.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Jan. 13 was $25.69/bbl, down 7¢.

Contact Paula Dittrick at

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