Light, sweet crude oil prices closed above $40/bbl on the New York market Mar. 17 for the first time since Dec. 3, 2015, and US natural gas futures settled at nearly $1.94/MMbtu, their highest level in a month.
US oil futures prices have rallied for the most part since Feb. 11 when the front-month contract dipped to $26.21/bbl, which was nearly a 13-year low.
Analysts say crude prices have been supported by hopes that producers would freeze production levels and that the global glut would begin to abate. Oil prices also were supported by a weakening US dollar.
The Wall Street Journal Dollar Index, which tracks the US dollar against a basket of 16 currencies, was down 1.1% on Mar. 17 to 86.63, its lowest level since June 2015.
The dollar fell after US Federal Reserve officials suggested on Mar. 16 that the Fed likely would only raise the benchmark interest rate twice this year, down from earlier projections of four increases.
Gas prices climbed along with surging oil prices on Mar. 16-17. Platts Bentek issued a March report on US LNG exports and gas supply noting the domestic market is “flooded with gas” with no shortages expected.
High gas-storage levels limit any sustained upward pressure on gas prices, Platts Bentek said, adding that gas demand is down in part because March has been warmer than normal.
“Total gas demand in the US this year to date is down 7.9 bcfd from the same period last year. US gas production is up 1.1 bcfd and reached a record high of 73.8 bcfd as recently as late February,” Platts Bentek said. “US gas storage levels at the beginning of March were 42% higher than the 5-year average and 58% higher than at the same time last year.”
US gas storage withdrawals are likely to be ending soon, potentially leaving working gas inventories at a very high level, Platts Bentek said.
The NYMEX natural gas contract for April rose nearly 7¢ to a rounded $1.94/MMbtu. The Henry Hub gas price was $1.82/MMbtu, up 8¢.
Heating oil for April delivery rose 2¢ to a rounded $1.25/gal. The price for reformulated gasoline stock for oxygenates blending for April gained 2¢ to a rounded $1.44/gal on Mar. 17.
The Brent crude contract for May on London’s ICE gained $1.21 to $41.54/bbl. The June contract climbed $1.20 to $42.18/bbl. The ICE gas oil contract for April was $375.25/tonne, up $8.25.
The average price for OPEC’s basket of 12 benchmark crudes was $36.36/bbl, up $1.86.
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