MARKET WATCH: NYMEX oil price climbs above $42/bbl, reaching 2016 high

Light, sweet crude oil prices for May delivery climbed nearly $2 on the New York market Apr. 12 to settle slightly above $42/bbl, marking the highest front-month closing for the year so far. Brent crude oil prices on the London market for June closed above $44/bbl.

Ole Hansen, head of commodity strategy at Saxo Bank, issued a research note attributing the jump to recent upbeat remarks by market observers about chances for a production-freeze deal during an Apr. 17 meeting scheduled in Qatar.

Representatives of major producers, including both the Organization of Petroleum Exporting Countries and nonOPEC countries, plan to attend.

“Crude oil extended its rally…following a ‘there is hope’ for a deal in Doha,” Hansen said, adding he believes analysts could be giving the meeting “too much weight.” “Instead, the real impact is from the shale oil fields of North America and other high-cost producers. A surging oil price will eventually remove this support as it stabilizes production,” Hansen said.

Prices were falling in early Apr. 13 trading in New York pending the release of the US Energy Information Administration’s weekly crude oil and products inventory report later in the day.

Energy prices

The May crude oil contract on the New York Mercantile Exchange gained $1.81 to $42.17/bbl on Apr. 12, and the June contract was up $1.75 to $43.50/bbl.

The NYMEX natural gas contract for May rose 9¢ to a rounded $2/MMbtu. The Henry Hub price was up 6¢ to $1.94 on Apr. 12.  

Heating oil for May delivery rose 6¢ to a rounded $1.27/gal. The price for reformulated gasoline stock for oxygenates blending for May was up 2.6¢ to a rounded $1.53/gal.

The Brent crude contract for June on London’s ICE climbed $1.86 to $44.69/bbl. The July contract climbed $1.78 to $44.73/bbl. The gas oil contract was $376/tonne, up $13.75.

The average price for the Organization of Petroleum Exporting Countries’ basket of 13 benchmark crudes on Apr. 12 was $38.62/bbl, up $1.60.

Contact Paula Dittrick at paulad@ogjonline.com.

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