Light, sweet crude oil prices dropped nearly $1/bbl on the New York market on Jan. 20, the first day of US floor trading since the lifting of sanctions against Iran. Analysts and traders say the oil price decline could likely continue while Iranian oil exports add to already oversupplied world oil markets.
Floor trading was closed on the New York Mercantile Exchange on Jan. 18 in observance of the Martin Luther King Jr. holiday although there was electronic trading.
World oil prices are apt to continue falling, agreed the International Energy Agency’s first monthly report for 2016, citing growing crude oil supply.
IEA said the world could face an estimated excess 1.5 million b/d of crude supplies through this year’s first half. Markets will face enormous strain in absorbing new supplies from producers such as Iran, IEA said, adding the oil market will face its third successive year where supplies exceed demand by 1 million b/d.
Separately, the International Monetary Fund slashed its global growth forecast to 3.4% for 2016. IMF cited sharper downturns in many developing countries and a weaker-than-expected US expansion as the reasoning for cutting its previous forecast for 2016 global growth.
The February crude oil contract on the New York Mercantile Exchange declined 96¢ to settle at $28.46/bbl on Jan. 19. The March contract was down 82¢ to settle at $29.57/bbl.
The NYMEX natural gas contract for February dropped less than a penny to a rounded $2.09/MMbtu. The Henry Hub gas price was $2.20/MMbtu on Jan. 19, up 1¢ from Jan. 15.
Heating oil for February delivery dropped 2.6¢ to a rounded 91¢/gal. The price for reformulated gasoline stock for oxygenates blending for February was up 0.5¢ to a rounded $1.03/gal.
The March ICE contract for Brent crude gained 21¢ to settle at $28.76/bbl on Jan. 19, and the February contract was up 24¢ to $29.47/bbl. The ICE gas oil contract was $270.25/tonne on Jan. 19, down $8.25.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Jan. 19 was $23.85/bbl, up 27¢.
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