MARKET WATCH: NYMEX October oil price falls below $46/bbl on higher rig count

Light, sweet crude oil contracts fell more than $1.70 on the New York market Sept. 9 to settle under $46/bbl after a weekly US rig count indicated more rigs working.

The US rig count surged above 500 units working, gaining 11 rigs to a total of 508 for the week ended Sept. 9, said Baker Hughes Inc. The latest total still remains 340 units lower than a year ago. (OGJ Online, Sept. 9, 2016).

Earlier in the week, chief executive officers from various oil companies told a Barclays energy conference that they are using exploration and production investments more efficiently and that $50/bbl oil “appears much more palatable,” than it has in past decades, Barclays said.

“Producers and service companies almost universally gave the impression that they are well-positioned to return to growth mode,” at $50/bbl oil, Barclays said in a research note.

On world oil markets, Libya’s recently resumed oil exports were threatened by fighting. Forces opposed to Libya’s unity government reportedly attached three ports on the central coast Sept. 11.

Forces loyal to Gen. Khalifa Haftar were credited with the attacks, marking the first armed conflict on oil terminals since agreements were reached between Libya’s eastern government and the Western-backed Government of National Accord. Gen. Haftar opposes the unity government. Libya has experienced political disputes and armed struggles since dictator Moammar Gadhafi was killed in 2011.

Previously, the chairman of Libya’s National Oil Corp. and his counterpart appointed by the government in Bayda agreed to unify the state company under a single management to help end a conflict about control of Libya’s crude oil exports and oil revenues (OGJ Online, July 5, 2016).

A Libyan oil official told the Wall Street Journal that the fighting could jeopardize plans to resume exports after a 2-year interruption.

Energy prices

The October crude oil contract on the New York Mercantile Exchange fell $1.74 on Sept. 9 to close at $45.88/bbl. The November contract dropped $1.80 to $46.46/bbl.

The natural gas contract for October declined nearly 1¢ to at a rounded $2.80/MMbtu. On the spot market, the Henry Hub gas price was up 8¢ to $2.92/MMbtu.

Heating oil for October decreased 5¢ to a rounded $1.43/gal. The price for reformulated gasoline stock for oxygenates blending dropped 5.5¢ to a rounded $1.36/gal.

The November Brent crude contract on London’s ICE declined $1.98 to settle at $48.01/bbl and the December contract dropped $1.96 to settle at $48.47/bbl. The September gas oil contract settled at $427.55/tonne, down 25¢.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Sept. 9 was $44.55/bbl, down 6¢.

Contact Paula Dittrick at

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