The light, sweet crude oil price for September delivery fell slightly on both the New York and London markets on Aug. 5 amid reports that some members of the Organization of Petroleum Exporting Countries want to revisit the idea of setting new production limits with non-OPEC members.
Mohammed al-Sada, Qatar’s energy minister and OPEC president, said Aug. 8 that he expects crude oil demand will be strong during the second half of this year. OPEC will hold informal talks during the International Energy Forum in Algeria on Sept. 26-28, he said.
“OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market,” al-Sada said.
Some OPEC delegates told the Wall Street Journal that they doubt a decision or recommendation will be made during the informal discussion in Algeria.
Venezuela, Ecuador, and Kuwait would like to revisit the idea of setting new limits on oil production, the WSJ reported last week. A similar initiative was rejected during April talks in Qatar between OPEC members and representatives of producing countries outside OPEC such as Russia.
Ole Hansen, Saxo Bank’s head of commodity strategy, issued a research note that said, “The third quarter tends to be a challenging quarter for oil prices due to the seasonal slowdown in refinery demand, which leads to rising inventories.”
Hansen suggested “renewed verbal intervention from Russia and weaker OPEC members should help establish some support around $40/bbl.” He said the market rebalancing “will eventually pick up speed provided that demand growth continues at the expected rate. The overhang of supply however will make it difficult for oil to make a clear break back above $50[/bbl] before the end of the year.”
The NYMEX crude oil contract for September delivery fell 13¢ to settle at $41.80/bbl on Aug. 5. The October contract dropped 12¢ to close at $42.57/bbl.
The natural gas contract for September dropped 6¢ to a rounded $2.77/MMbtu. On the spot market, the Henry Hub gas price declined 4¢ to $2.85/MMbtu on Aug. 5.
Heating oil for September edged down by a rounded 1¢ to $1.32/gal. The price for reformulated gasoline stock for oxygenates blending for September rose nearly 1¢ to a rounded $1.38/gal.
The Brent crude contract for October on London’s ICE dropped 2¢ on Aug. 5 to $44.27/bbl. The contract for November was down 2¢ to $44.61/bbl. The August gas oil contract settled at $372.50/tonne, up $5.75.
The average price for OPEC’s basket of 12 benchmark crudes was $40.08, up 48¢.
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