The price of light, sweet crude oil for July delivery settled slightly above $48/bbl May 23, marking its fourth consecutive session in which oil prices declined on the New York market.
“As output returns, especially in Nigeria and Canada, our view is that there will be downside to prices in the very near term—in the next few weeks,” Societe Generale SA said in a research note. “The Canadian output is more certain to return than the others.”
Alberta officials lifted mandatory evacuation May 23 for the last of the province’s oil sands production sites endangered by wildfires, Bloomberg reported.
Meanwhile, the situation in Nigeria remains uncertain. President Muhammadu Buhari vowed to crack down on “vandals and saboteurs” during April.
PGI Intelligence of London issued an Insight report saying Nigerian oil output likely will remain subject to continuing pipeline attacks for at least another 12 months. Niger Delta Avengers has claimed responsibility for many pipeline attacks. PGI said the group appears to have technical expertise.
“A wave of attacks on pipeline infrastructure in the oil-rich Niger Delta since the beginning of 2016 has had a devastating impact on Nigeria’s crude output,” PGI Intelligence said. Nigeria’s oil ministry on May 18 estimated production has fallen to 1.4 million b/d, the lowest since the mid-1990s when oil production was 2.2 million b/d.
“There is a strong likelihood that the high frequency of attacks on oil infrastructure will continue at least in the short to medium term, resulting in depressed oil output over much of 2016,” PGI Intelligence said. “The government’s handling of its crackdown on militants will be key to determining whether violence will escalate to the levels seen during the 2004-09 insurgency.”
Libya’s National Oil Co. said a 660,000-bbl oil cargo was exported on May 20. Oil exports have been threatened by conflicts between two governments claiming authority in Libya.
The NYMEX natural gas contract for June delivery fell less than a penny to remain at a rounded $2.06/MMbtu. Meanwhile, gas prices rose on the spot market where the Henry Hub price was $1.95/MMbtu, up 14¢.
Heating oil for June delivery declined 1¢ to $1.48/gal. The price for reformulated gasoline stock for oxygenates blending for June gained 1¢ to a rounded $1.65/gal.
The Brent crude contract for July on London’s ICE fell 37¢ to $48.35/bbl. The August contract dropped 34¢ to $48.93/bbl. The June gas oil contract dropped $2 to $438.75/tonne.
The Organization of Petroleum Exporting Countries basket of crudes price for May 23 was $44.07/bbl, down 70¢.
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