Light, sweet crude oil prices rallied Feb. 12 and jumped more than $3/bbl, closing at $29.44/bbl on the New York market, which broke a six-session losing streak. Brent crude oil prices on the London market also jumped by more than $3/bbl that day.
The rally came after the Wall Street Journal reported UAE Energy Minister Suhail bin Mohammed al-Mazrouei said members of the Organization of Petroleum Exporting Countries are all “ready to cooperate,” on production levels though only with “total cooperation from everyone,” meaning non-OPEC members (OGJ Online, Feb. 12, 2016).
Any such agreement has yet to materialize. Compared with the price highs of 2014, oil prices have slumped more than 70%. The biggest oil producers, including US unconventional operators, Saudi Arabia, and Russia pumped at near-record pace. But the rate of growing US oil production has started to slow.
Barclays issued a research note saying that its analysts expect US oil supply will decline during the second half, and that they expect West Texas Intermediate prices will strengthen relative to Brent prices.
As of Feb. 12, Brent for April delivery traded $1.45/bbl higher than the April US light, sweet crude contract.
Regarding US natural gas, Barclays analysts said they believe prices are about to face numerous “bearish speed bumps” because of high storage levels.
“Through Feb. 11, cash prices have averaged $2.22/MMbtu slightly above our first-quarter forecast of $2.20/MMbtu. Cash prices may be in for a rough rest of the quarter as resilient production goes head-to-head with storage drawdowns, which will chase limited demand,” Barclays said.
The NYMEX natural gas contract for March dropped 2.8¢ to a rounded $1.97/MMbtu. The Henry Hub gas price was down 5¢ to $2.07/MMbtu on Feb. 12.
Heating oil for March delivery climbed 9¢ to a rounded $1.07/gal. The price for reformulated gasoline stock for oxygenates blending for March rose 10¢ to a rounded $1.04/gal on Feb. 12.
The April ICE contract for Brent crude spiked by $3.30 to $33.36/bbl on Feb. 12, and the May contract jumped $3.21 to settle at $33.99/bbl. The ICE gas oil contract for March was $311.75/tonne, up $26.25.
The average price for OPEC’s basket of 12 benchmark crudes was $26.74/bbl, up $1.53.
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