Light, sweet crude prices for February delivery settled with another drop Jan. 8 despite experiencing price gains earlier in the day. The US benchmark oil price settled on the New York market at $33.16/bbl on Jan. 8, which was the lowest closing price since Feb. 9, 2004.
Analysts said oil traders focused on a rising dollar. Oil trades in dollars so a strengthening dollar makes oil more expensive for buyers using other currencies. The Wall Street Journal Dollar Index rose 0.3%.
Meanwhile, US jobs statistics released Jan. 8 showed payrolls rose a seasonally adjusted 292,000 although US unemployment remained at 5%.
Investment banker Simmons & Co. International revised its long-term oil price forecasts, dropping its 2018 US forecast to $49.37/bbl from $70/bbl. Simmons & Co. noted unconventional producers continue to improve production rates per well and also continue to lower costs using new technology.
Separately, Baker Hughes Inc. reported the overall US drilling rig count began the year with its largest decline since last April, plunging 34 units to 664 for the week ended Jan. 8.
The new weekly total was the lowest since Aug. 20, 1999, and down 1,086 year-over-year. BHI also reported that the average US rig count for December was 714, down 46 from November and down 1,168 from December 2014 (OGJ Online, Jan. 8, 2016).
The NYMEX natural gas contract for February rose 9¢ to a rounded $2.47/MMbtu. The Henry Hub gas price rose 12¢ to $2.47/MMbtu on Jan. 8.
Heating oil for February delivery dropped 1.4¢ to a rounded $1.05/gal. The price for reformulated gasoline stock for oxygenates blending for February was down 1.8¢ to a rounded $1.13/gal.
The February ICE contract for Brent crude dropped 20¢ to $33.55/bbl, and the March contract was down 16¢ to $33.93/bbl. The ICE gas oil contract was $296.75/tonne on Jan. 8, down $19.25.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Jan. 8 was $28.46/bbl, up 61¢.
Contact Paula Dittrick at firstname.lastname@example.org.