Oil prices dropped below $50/bbl in early New York futures trading on June 10, but Commerzbank analysts suggested it had more to do with concerns about financial markets rather than about oil market fundamentals. US stock market indexes slipped as did stock indexes in Europe and Asia.
Analysts attributed the oil price decline that started on June 9 to a strengthening dollar. The Wall Street Journal Dollar Index, which tracks the dollar against a basket of other currencies, was up 0.3% June 9. Oil trades in dollars so a stronger dollar makes oil more expensive for buying using other currencies.
The Federal Reserve policy committee is meeting June 14-15. Investors await indications about whether the Fed might raise interest rates in July or September. That decision also could strengthen the dollar, possibly dampening oil prices.
The US Energy Information Administration reported natural gas in underground storage across the Lower 48 was estimated at 2.97 tcf as of June 3, a net increase of 65 bcf from the previous week.
Gas storage levels were 660 bcf higher than last year at this time and 722 bcf above the 5-year average, the Gas Storage Report said.
Continental Resources Inc. Chief Executive Officer Harold Hamm told Bloomberg that his company has begun finishing drilled but uncompleted wells in the Bakken formation. But Hamm said crude oil prices would need to reach and stay above $60/bbl for a while before Continental starts drilling any new wells there.
The July crude oil contract on the New York Mercantile Exchange fell 67¢ on June 9, settling at $50.56/bbl. The August contract fell 62¢ to $51.22/bbl.
Natural gas for July jumped nearly 15¢ to a rounded $2.62/MMbtu on NYMEX while the Henry Hub cash price fell 2¢ to $2.33/MMbtu.
Heating oil for July delivery declined 2¢ to a rounded $1.55/gal. The price for reformulated gasoline stock for oxygenates blending for July edged down less than a penny to remain at a rounded $1.62/gal.
The August Brent crude contract on London’s ICE fell 56¢ to $51.95/bbl. The September contract was down 56¢ to $52.42/bbl. The June gas oil contract fell $4 to $460.50/tonne.
The Organization of Petroleum Exporting Countries’ basket of crudes price for June 9 was $48.02/bbl, up 26¢.
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