Oil prices surged Mar. 16 on New York and London markets after reports that leading oil producers might be willing to freeze production at January levels even if Iran refuses to join the proposed pact.
Qatar said it plans an Apr. 17 meeting in Doha for representatives of the Organization of Petroleum Exporting Countries and also non-OPEC countries (OGJ Online, Mar. 16, 2016).
Ole Hansen, Saxo Bank head of commodity strategy, said oil producers have been increasingly willing to intervene, at least verbally, since oil prices tumbled below $30/bbl.
“By doing that they have, so far without actually changing anything, been able to buy themselves time,” Hansen said. “Oil markets are currently in a race against the clock based on the belief that over time the price will recover.”
Slowing US production and a continued slow rise in demand will eventually ease the world oil oversupply, he said.
“Buying time while keep pumping at full throttle makes sense as long the market plays ball,” Hansen said.
Meanwhile, the market took little notice of the weekly US government report, which showed another increase in US oil and product supplies.
The US Energy Information Administration said commercial crude oil inventories, excluding the Strategic Petroleum Reserve, gained 1.3 million bbl for the week ended Mar. 11 compared with the previous week. The latest total was estimated at 523.2 million bbl, EIA said (OGJ Online, Mar. 16, 2016).
Statistics within the Petroleum Status Report showed US oil production was 9.06 million b/d for the week ended Mar. 11, down 10,000 b/d from the previous week and down 351,000 b/d from the same period 1 year ago.
EIA’s domestic production includes lease condensate and is estimated using short-term forecasts for the Lower 48 and the latest production estimate from Alaska.
Regarding natural gas in underground storage across the Lower 48, EIA estimated levels at 2.478 tcf as of Mar. 11, a net decline of 1 bcf from the previous week.
The Gas Storage Report said stocks were 998 bcf higher than last year at this time and 807 bcf above the 5-year average of 1.671 tcf.
The NYMEX natural gas contract for April rose 1.7¢ to a rounded $1.87/MMbtu. The Henry Hub gas price was $1.74/MMbtu, dropping 4¢.
Heating oil for April delivery rose 5¢ to a rounded $1.23/gal. The price for reformulated gasoline stock for oxygenates blending for April gained by 1¢ to a rounded $1.42/gal on Mar. 16.
The Brent crude contract for May on London’s ICE gained $1.59 to $40.33/bbl. The June contract climbed $1.59 to $40.98/bbl. The ICE gas oil contract for April was $367/tonne, up $1.75.
The average price for OPEC’s basket of 12 benchmark crudes was $34.50/bbl, up 81¢.
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