Light, sweet crude oil prices dropped Feb. 9 to settle under $28/bbl on the New York market while Brent crude oil prices plunged by more than $2.50 to settle at just above $30.30/bbl after a US government report forecast global oil inventories would climb during 2016-17, adding to an oversupply.
In its February Short-Term Energy Outlook (STEO), the Energy Information Administration forecast an average Brent crude price of $37.52/bbl in 2016 compared with its previous forecast of $40.15/bbl. West Texas Intermediate prices are expected to average $37.59/bbl, down from $38.54/bbl forecast last month.
In the report, EIA forecast global oil inventories to increase by annual average of 1 million b/d in 2016 and by an additional 300,000 b/d in 2017, both higher than previous forecasts (OGJ Online, Feb. 9, 2016).
Separately, an official of Kuwait Petroleum Corp. told the Wall Street Journal that Kuwait plans to increase its crude production by 150,000 b/d by the third quarter. Iran, meanwhile, has vowed to increase its oil production by 1 million b/d during 2016 with the lifting of nuclear-related Western sanctions.
The March crude oil contract on NYMEX dropped $1.75 to settle at $27.94/bbl on Feb. 9. The April contract declined $1.90 to $29.74/bbl.
The NYMEX natural gas contract for March dropped 4¢ to a rounded $2.10/MMbtu. The Henry Hub gas price was down 5¢ to $2.17/MMbtu on Feb. 9.
Heating oil for March delivery fell 7¢ to a rounded 98¢/gal. The price for reformulated gasoline stock for oxygenates blending for March was down 5.7¢ to a rounded 90¢/gal on Feb. 9.
The April ICE contract for Brent crude fell $2.56 to $30.32/bbl on Feb. 9, and the May contract dropped $2.62 to settle at $30.98/bbl. The ICE gas oil contract for February was $287/tonne, down $17.50.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $28.33/bbl, down 67¢.
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