Light, sweet oil prices rose by more than $1/bbl on the New York market Sept. 26 to close at just under $46/bbl for November delivery. Brent crude oil prices also gained more than $1/bbl on the London market Sept. 26 to settle above $47/bbl for November delivery.
Crude oil prices are volatile as market participants await results of talks among Organization of Petroleum Exporting Countries members, said Ole Hansen of Saxo Bank. The informal meeting is scheduled in Algeria on the sidelines of another energy conference this week.
“The oil market has…once again been taken hostage to soundbites from major oil producers,” Hansen said, adding the likelihood of a proposed production-freeze agreement “seems to be fading once again.”
Iran Oil Minister Bijan Zanganeh arrived in Algeria calling the Sept. 27 informal meeting “consultative,” which appeared to dim the chances for any immediate agreement. A formal OPEC meeting is scheduled for Nov. 30.
“Hopes of a deal have been rising and falling,” Hansen said. “The almost binary nature of the outcome has triggered rising volatility.”
Saudi Arabia offered to cut its production to January levels if Iran freezes its production at current levels, Hansen said. Iran produced about 3.6 million b/d in July and August.
Iranian oil officials have said they do not expect a deal to be made in Algiers, adding that Iran remains unwilling to freeze oil output while trying to build its share of the oil market.
The natural gas contract for October increased 4¢ to a rounded $2.99/MMbtu. On the spot market, the Henry Hub gas price rose 1¢ to $3.05/MMbtu.
Heating oil for October gained 4¢ to a rounded $1.45/gal. The price for reformulated gasoline stock for oxygenates blending was up 2.5¢ to a rounded $1.40/gal.
The November Brent crude contract on London’s ICE rose $1.46 to settle at $47.35/bbl and the December contract climbed $1.45 to settle at $47.93/bbl. The October gas oil contract settled at $425.75/tonne, up 25¢.
The average price for OPEC’s basket of benchmark crudes on Sept. 26 was $42.16/bbl, down 73¢.
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