The light, sweet crude oil price for September continued dropping on the New York market July 28 to settle at $41.14/bbl—the contract’s lowest front-month closing since Apr. 19. The contract has fallen in eight of the last nine trading sessions.
“We believe this world of low [prices] and a lot of volatility in prices is here to stay,” Ryan Lance, ConocoPhillips chief executive officer, said during a July 28 conference call. “We’re seeing that in spades right now.”
Eni SPA Chief Executive Officer Claudio Descalzi told the Wall Street Journal that he sees Brent crude oil averaging $40-$45/bbl through yearend. For 2017, he expects oil prices will trade at $50-55/bbl.
Eric Nuttall of Sprott Energy Fund issued a commentary in which he said US benchmark oil prices need to reach $60/bbl in 2017 if producers are to increase drilling activity enough to offset production declines and meet the world’s energy demand.
“Should this oil-price increase not materialize, then draws from global storage will continue and eventually storage levels will reach critically low levels,” Nuttall said.
Unlike some market observers who warn of a world awash in oil, Nuttall maintains that the oil market is undersupplied and will remain so until an oil-price increase prompts higher drilling activity.
Natural gas in underground storage across the Lower 48 climbed 17 bcf to 3.29 tcf for the week ended July 22, the US Energy Information Administration estimated.
The Gas Storage Report said stocks were 436 bcf higher than last year at this time and 524 bcf above the 5-year average of 2.77 tcf.
Gas prices jumped on the small weekly addition to storage, marking was the biggest daily gain in US gas futures in 7 months.
The NYMEX crude oil contract for September dropped 78¢ to settle at $41.14/bbl on July 28. The October contract dropped 75¢ to close at $41.86/bbl.
The natural gas contract for September gained 2¢ to a rounded $2.86/MMbtu. On the spot-market, the Henry Hub gas price declined 4¢ to $2.76/MMbtu on July 28.
Heating oil for August delivery dropped 2.4¢ to a rounded $1.27/gal. The price for reformulated gasoline stock for oxygenates blending for August dipped 1.5¢ to a rounded $1.31/gal.
The September Brent crude contract on London’s ICE dropped 77¢ on July 28 to $42.70/bbl. The contract for October declined 68¢ to $43.23/bbl. The August gas oil contract settled at $373.75/tonne, down $9.50.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $39.79/bbl, down 70¢.
Contact Paula Dittrick at email@example.com.