Crude oil prices gained modestly on the New York and London markets June 2 after the Organization of Petroleum Exporting Countries said its members agreed to leave its current high production strategy intact despite calls from a few members for a collective production cap.
Brent crude oil prices settled June 2 above $50/bbl. Prices were gaining in early June 3 trading on the New York market. The next OPEC meeting is scheduled Nov. 30 in Vienna.
An OPEC statement released June 2 noted that since December 2015, “Crude oil prices have risen by more than 80%, supply and demand is converging, and oil and producer stock levels in the [Organization for Economic Cooperation and Development] have recently shown moderation.”
OPEC agreed to admit Gabon back into the cartel. Within OPEC, Gabon has the smallest oil production at 240,000 b/d. Gabon had left OPEC about 20 years ago in a dispute over membership fees.
Gabon President Ali Bongo Ondimba said in May that the country was negotiating to rejoin OPEC in efforts to “protect the market.”
Separately, the Energy Information Administration estimated US oil production at 8.73 million b/d for the week ended May 27, down 32,000 b/d from a week ago and 851,000 b/d from the same period a year ago, the Petroleum Status Report said.
The EIA estimated natural gas levels in underground storage across the Lower 48 at 2.9 tcf as of May 27, which was a net increase of 82 bcf from the previous week. Stocks were 712 bcf higher than last year at this time and 753 bcf above the 5-year average of 2.15 tcf, the Gas Storage Report said.
The NYMEX natural gas contract for July delivery gained 2¢ to a rounded $2.40/MMbtu. The Henry Hub price was $2.30/MMbtu, up 4¢.
Heating oil for July delivery edged up less than a penny to a rounded $1.51/gal. The price for reformulated gasoline stock for oxygenates blending for July increased nearly 2¢ to a rounded $1.63/gal.
The August Brent crude contract on London’s ICE climbed 32¢ to $50.04/bbl. The August contract was up 31¢ to $50.46/bbl. The June gas oil contract rose $6 to $449.75/tonne.
OPEC’s basket of crudes price for June 2 was $45.58/bbl, up 39¢.