MARKET WATCH: NYMEX crude oil prices top $34/bbl on optimism about production freeze

Light, sweet crude oil prices on the New York market gained modestly to settle above $34/bbl on Mar. 1, and Russia state news agency TASS reported Russia’s Energy Minister Alexander Novak said a “critical mass” of oil-producing countries had agreed to freeze oil production.

Novak said countries producing 73% of the world’s oil have agreed to the tentative deal, TASS reported.

Russia, Saudi Arabia, Venezuela, and Qatar announced in February that they were willing to freeze production at January levels provided other countries also adopt the freeze. Another meeting of producers is scheduled for mid-March, Russia spokesmen have said.

The United Arab Emirates’ Energy Minister Suhail al-Mazrouei said Mar. 1 that “everyone should move toward freezing production whether they like it or not,” UAE’s state news agency reported.

Meanwhile, US production has declined from a peak in April 2015, but the decline has come more slowly than some analysts expected.

The US Energy Information Administration was scheduled Mar. 2 to release its weekly US oil and product inventory report. Separately, the American Petroleum Institute estimated crude oil supplies gained 9.9 million bbl for the week ended Feb. 26.

Energy prices

The April crude oil contract on the New York Mercantile Exchange climbed 65¢ to settle at $34.40/bbl on Mar. 1, which was the highest front-month price since Jan. 5. The May contract was up 57¢ to $36.15/bbl.

The NYMEX natural gas contract for April was up 3¢ to $1.74/MMbtu. The Henry Hub gas price fell 5¢ on Mar. 1 to $1.57/MMbtu.

Heating oil for April delivery rose 0.5¢ to a rounded $1.10/gal. The price for reformulated gasoline stock for oxygenates blending for April was down 1.7¢ to a rounded $1.30/gal on Mar. 1.

The May ICE contract for Brent crude climbed 24¢ to $36.81/bbl, which was the highest front-month price for that contract since Jan. 4. The June ICE contract also gained 24¢ to settle at $37.47/bbl. The ICE gas oil contract for March was $323/tonne, down $1.50.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was up $1.46 to $31.59/bbl on Mar. 1.

Contact Paula Dittrick at paulad@ogjonline.com.

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