MARKET WATCH: Oil prices gain on reports of Iran’s letter to OPEC

The light, sweet crude oil price for October delivery gained modestly to hover around $48/bbl Aug. 23 after reports that Iran has agreed to attend an informal meeting of the Organization of Petroleum Exporting Countries on the sidelines of an energy conference in Algeria late next month.

Iran sent a letter to OPEC members saying it would attend the cartel’s talks in Algeria, OPEC delegates told the Wall Street Journal, which also reported that an Iranian oil ministry press official would not comment.

Some OPEC members again are pushing for a deal with non-OPEC members to freeze production at current levels, but analysts generally are doubtful that any such deal will be reached. Similar efforts in April failed to result in any deal.

Iran has sought to increase its oil production since international sanctions were lifted earlier this year.

Goldman Sachs Group Inc. released a research note to the media Aug. 23 saying it sees oil prices likely to trade in a range of $45-50/bbl through mid-2017.

“The oil-price recovery is tenuous,” Goldman Sachs said. “A sustainable pickup in disrupted production would lead us to lower our oil price forecast.”

The US Energy Information Administration was scheduled Aug. 23 to release its weekly oil and product inventory report.

Energy prices

The NYMEX crude oil contract for October gained 69¢ to close at $48.10/bbl on Aug. 23. The October contract rose 72¢ to close at $48.75/bbl.

The natural gas contract for September climbed 8¢ to a rounded $2.76/MMbtu. On the spot market, the Henry Hub gas price dropped 3¢ to $2.71/MMbtu.

Heating oil for September climbed 1.5¢ to a rounded $1.50/gal. The price for reformulated gasoline stock for oxygenates blending for September gained a rounded 1.5¢ to a rounded $1.50/gal.

The Brent crude contract for October delivery on London’s ICE rose 80¢ to settle at $49.96/bbl. The contract for November was up 76¢ to $50.32/bbl. The September gas oil contract settled at $440.25/tonne on Aug. 23, up $4.50.

The average price for OPEC’s basket of 12 benchmark crudes was $45.34/bbl on Aug. 23, down 70¢.

Contact Paula Dittrick at

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