Light, sweet crude oil prices for May delivery dropped modestly Apr. 7 on the New York market but still closed above $37/bbl, and oil prices were gaining in early Apr. 8 trading, which analysts attributed to optimism about the US economy.
US Federal Reserve Chair Janet Yellen and three former Fed leaders sought to dispel concerns that the nation might be headed toward recession. Yellen joined former Fed Chairmen Ben Bernanke, Alan Greenspan, and Paul Volcker in an unusual session in New York on Apr. 7. They said the US economy is progressing.
“This is an economy on a solid course, not a bubble economy,” Yellen said. It has made “tremendous progress” since 2007-09.
Jason Gammel, analyst at Jefferies, sees an oil-price recovery coming later this year, although he said the recovery “could be protracted.”
Gammel said, “We believe the current oil price is unsustainable and expect a fundamental price recovery when markets move into better balance in mid- to late-second part of the year.”
US natural gas prices for May settled above $2/MMbtu on Apr. 7, marking the first time a gas front-month contract has settled above $2 since Feb. 10.
Gas prices rose on the New York market after the US Energy Information Administration estimated that working gas in underground storage across the Lower 48 was 2.48 tcf as of Apr. 1, marking a net increase of 12 bcf from the previous week (OGJ Online, Apr. 8, 2016).
William Featherston, managing director at UBS investment research, said the injection implied the supply-demand balance tightened week over week.
The NYMEX gas contract for May was up 10¢ to $2.02/MMbtu. The Henry Hub price was up 7¢ to $1.93/MMbtu on Apr. 7.
Heating oil for May delivery declined 1.5¢ to a rounded $1.13/gal. The price for reformulated gasoline stock for oxygenates blending for May was down nearly 1.4¢ to a rounded $1.38/gal.
The Brent crude contract for June on London’s ICE dropped 41¢ to $39.43/bbl. The July contract dropped 51¢ to $39.49/bbl. The gas oil contract was $323.50/tonne, down $5.50.
The average price for the Organization of Petroleum Exporting Countries’ basket of 13 benchmark crudes on Apr. 7 was $34.71/bbl, up 78¢.
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