Oil prices were rising in early Aug. 3 trading yet still hovered under $40/bbl pending release of the inventory report. Analysts say a glut in products drove the latest crude price dip.
“Sentiment is still quite weak, and it takes some convincing data to change the negative sentiment,” Eugen Weinberg of Commerzbank said. “Definitely, there will be a rebalancing of the market, but it will likely take longer than expected before.”
Societe Generale analyst Michael Wittner said, “We expect crude prices to bottom out in the high $30 range.”
Production disruptions in Canada and Nigeria helped push the benchmark US crude futures price to above $50/bbl in early June. Analysts say weak oil demand growth has since pushed light, sweet crude prices into a bear market (OGJ Online, Aug. 2, 2016).
The NYMEX crude oil contract for September declined 55¢ to settle at $39.51/bbl on Aug. 2. The October contract dropped 54¢ to close at $40.30/bbl.
The natural gas contract for September fell nearly 4¢ to a rounded $2.73/MMbtu. On the spot market, the Henry Hub gas price declined by 8¢ to $2.79/MMbtu on Aug. 2.
Heating oil for September edged down a fraction of a penny to remain at a rounded $1.26/gal. The price for reformulated gasoline stock for oxygenates blending for September edged up nearly 1¢ to a rounded $1.31/gal.
The Brent crude contract for October on London’s ICE dropped 34¢ on Aug. 1 to $41.80/bbl. The contract for November was down 37¢ to $42.23/bbl.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $38.29/bbl, down 81¢.
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