MARKET WATCH: NYMEX, Brent oil prices ended week with rally

The light, sweet crude oil price for September delivery climbed $1/bbl on the New York market Aug. 12 during the second day of an oil-price rally triggered by comments from Saudi Energy Minister Kahlid al-Falih that the kingdom might be willing to discuss production limits.

“If there is a need to take any action to help the market rebalance, then we would, of course in cooperation with OPEC and major non-OPEC exporters,” he said of the Organization of Petroleum Exporting Countries (OGJ Online, Aug. 12, 2016).

Some analysts remain skeptical Saudi Arabia would support a cap. An April meeting between OPEC and non-OPEC producers failed to reach any such agreement.

Qatar’s Energy Minister Mohammed bin Saleh al Sada, OPEC president, said cartel members will informally meet on the sidelines of the International Energy Forum in Algeria Sept. 26-28 (OGJ Online, Aug. 8, 2016). Some producers have renewed calls to set new production limits.

US natural gas futures and spot prices also climbed Aug. 12. Barclays analysts attributed the price rise to recent strong power demand for air conditioning and continued hot temperature forecasts.

Second-half US gas production is likely to fall from first-half production levels based on Northeastern gas producers’ comments made during second-quarter earnings statements, Barclays said.

“Rig activity is expected to pick up in the coming months, but this should have a more pronounced effect on 2017 production levels,” Barclays analyst Warren Russell of New York said in a research note.

Energy prices

The NYMEX crude oil contract for September jumped $1 to $44.49/bbl on Aug. 11. The October contract climbed 95¢ to close at $45.18/bbl.

The natural gas contract for September rose 3.5¢ to a rounded $2.58/MMbtu. On the spot market, the Henry Hub gas price rose 3¢ to $2.70/MMbtu on Aug. 12.

Heating oil for September gained a rounded 2¢ to a rounded $1.40/gal. The price for reformulated gasoline stock for oxygenates blending for September edged up by less than a penny to a rounded $1.37/gal.

The Brent crude contract for October on London’s ICE rose 93¢ to $46.97/bbl. The contract for November was up 90¢ to $47.26/bbl. The September gas oil contract settled at $409.50/tonne on Aug. 12, up $6.50.

The average price for OPEC’s basket of 12 benchmark crudes was unavailable for Aug. 12.

Contact Paula Dittrick at paulad@ogjonline.com.

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