The light, sweet crude oil contract for October delivery dropped on the New York market Sept. 16 to end the week with a settlement just above $43/bbl, marking its lowest settlement in about 5 weeks. Brent crude oil for November delivery, meanwhile, also fell on the London market to settle below $46/bbl.
Members of the Organization of Petroleum Exporting Counties are expected to informally discuss the oil market and potentially freezing production levels. The talks are scheduled during an energy conference in Algeria starting Sept. 26.
Libya seeks to boost its oil output to as much as 1 million b/d by Dec. 31 compared with current production of 300,000 b/d, said Mohamed Oun, Libya’s OPEC delegate. Oun has repeatedly said Libya opposes a production freeze until its production reaches 1.6 million b/d.
“Definitely, we will not agree to a freeze without reaching our quota from before” the death of dictator Moammar Gadhafi in 2011, Oun said in a Wall Street Journal interview.
Barclays issued a research note saying the upcoming OPEC talks probably will face ambiguity from Iran that could compromise any potential freeze agreement.
“When OPEC members arrive in Algiers, Libya’s possible return may be at the front of everyone’s minds,” said Michael Cohen of Barclays in New York. “Yet, Iran’s participation in any statement or freeze framework remains ambiguous for several reasons. Iran might just be amenable to freezing output if it bases that decision on crude production data for August that shows it has reached its monthly pre-sanctions level.”
But Iran’s also has yet to achieve a pre-sanctions market share or a pre-sanctions export level.
The October crude oil contract on the New York Mercantile Exchange dropped 88¢ on Sept. 16 to close at $43.03/bbl. The November contract was down 90¢ to $43.62/bbl.
The natural gas contract for October climbed 2¢ to a rounded $2.95/MMbtu. On the spot market, the Henry Hub gas price was down 1¢ to $2.94/MMbtu.
Heating oil for October edged down a fraction of a penny to a rounded $1.41/gal. The price for reformulated gasoline stock for oxygenates blending was up 3¢ to a rounded $1.46/gal.
The November Brent crude contract on London’s ICE fell 82¢ to settle at $45.77/bbl and the December contract fell 82¢ to settle at $46.24. The October gas oil contract settled at $412.50/tonne, down $2.50.
The average price for OPEC’s basket of 12 benchmark crudes on Sept. 16 was $41.74/bbl, up 7¢.
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