Light, sweet crude oil prices for May delivery rallied late in the Apr. 4 trading session to end the day with a gain, settling just below $36/bbl, while Brent also ended the day in positive territory, closing at nearly $38/bbl.
Ole Hansen, Saxo Bank head of commodity strategy, said oil prices once bounced after a period of losses. He noted that traders appear increasingly convinced that a low oil price has been established.
“Kuwait also helped calm the nerves about the upcoming meeting in Doha by saying that an agreement to freeze production was still on track,” Hansen said.
Meanwhile, Saudi Arabia has said it will not agree to freeze its oil production at January levels unless Iran also agrees to do the same, which appears unlikely. Iran has said it intends to ramp up its oil production and exports to regain market share since nuclear-related sanctions were lifted.
“This once again highlights the current confusion in the market where political statements are being combined with facts that Iranian oil production is rising,” and US oil production is falling.
Hansen noted that both US light, sweet crude and Brent crude prices found support in Apr. 4 trading.
“Currently however, we see the upside limited on Brent crude at $40 in the short term,” Hansen said.
The NYMEX natural gas contract for May was down 4¢ to $1.95/MMbtu. The Henry Hub price was down 3¢ to $1.91/MMbtu on Apr. 5.
Heating oil for May delivery was down 1.4¢ to a rounded $1.07/gal. The price for reformulated gasoline stock for oxygenates blending for May edged up a fraction of a cent to remain at a rounded $1.38/gal.
The Brent crude contract for June on London’s ICE climbed 18¢ to $37.87/bbl. The July contract rose 5¢ to $38.03/bbl. The gas oil contract was $314.50/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 13 benchmark crudes on Apr. 5 was $32.63/bbl, down 70¢.
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