The light, sweet crude oil price for September rallied by more than $1/bbl for a second consecutive day on the New York market Aug. 4 even as analysts and bankers remained concerned about an oversupply in world oil supplies.
Baker Hughes Inc. was scheduled Aug. 5 to release its weekly US rig count, which market observers watch closely for an indication of future US production.
“The timeline for market rebalancing has slipped in recent weeks, through a combination of weaker demand growth, a quicker rebound in supply from Nigeria, and stronger-than-anticipated output from Saudi Arabia, Russia, and others,” analysts at JP Morgan said in a recent report.
Some polled investment bankers have become less optimistic about the outlook for a 2017 oil-price recovery.
The Wall Street Journal surveyed 13 investment banks. They expect Brent crude will average $56/bbl in 2017. The outlook was down by more than $1/bbl from June’s survey. The banks expect light, sweet crude to average $55/bbl on US futures markets in 2017, down nearly $1/bbl from the previous survey.
Michael Wittner, chief oil analyst at Societe Generale SA, said, “For the time being, the path of least resistance for oil prices continues to be lower.”
Separately, the US Energy Information Administration estimated natural gas in underground storage across the Lower 48 at a rounded 3.29 tcf as of July 29. That level marked a net decline of 6 bcf from the previous week. Stocks were 389 bcf higher than last year at this time and 464 bcf above the 5-year average, the Gas Storage Report said.
The NYMEX crude oil contract for September climbed $1.10 to settle at $41.93/bbl on Aug. 4. The October contract gained $1.11 to close at $42.69/bbl.
The natural gas contract for September edged down less than a penny to a rounded $2.83/MMbtu. On the spot market, the Henry Hub gas price gained 1¢ to $2.89/MMbtu on Aug. 4.
Heating oil for September gained 3.8¢ to at a rounded $1.33/gal. The price for reformulated gasoline stock for oxygenates blending for September rose nearly 2¢ to a rounded $1.37/gal.
The Brent crude contract for October on London’s ICE climbed $1.19 on Aug. 4 to $44.29/bbl. The contract for November was up $1.15 to $44.63/bbl. The August gas oil contract settled at $366.75/tonne, up $3.25.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $39.60/bbl, up $1.57.
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