Light, sweet crude oil prices fell on the New York market Mar. 18 to close back under $40/bbl, after Baker Hughes Inc. reported a 1-unit increase in US rigs drilling for oil. Reaction to the rig count report abruptly ended an oil-price rally that briefly reached above $40/bbl for the first time this year.
The overall US drilling rig count posted its smallest decline of the year, noting the first rise in oil-directed rigs in 13 weeks (OGJ Online, Mar. 18, 2016).
Baker Hughes reported 4 units—all gas-directed—stopped drilling for the week ended Mar. 18, bringing the working rig total to 476, down 1,444 units since a pre-dive rig count peak of 1,920 on Dec. 5, 2014.
Meanwhile, oil futures on the New York market managed to rise 2.4% for the week ended Mar. 18, marking the benchmark’s fifth consecutive weekly increase.
Bank of America Merrill Lynch analysts said US prices are apt to face downward pressure because of lower driving demand and seasonal refinery maintenance.
“The oil-price crash was linear, but the recovery will not be,” Bank of America Merrill Lynch analysts said.
The NYMEX natural gas contract for April rose was down nearly 3¢ to a rounded $1.91/MMbtu. The Henry Hub gas price was $1.84/MMbtu, up 2¢.
Heating oil for April delivery dropped 1.5¢ to a rounded $1.24/gal. The price for reformulated gasoline stock for oxygenates blending for April declined 1¢ to a rounded $1.43/gal on Mar. 18.
The Brent crude contract for May on London’s ICE dropped 34¢ to $41.20/bbl. The June contract was down 32¢ to $41.86/bbl. The ICE gas oil contract for April was $375/tonne, down 25¢.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $36.59/bbl, up 23¢.
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