Light, sweet crude oil prices dropped moderately to settle just under $50/bbl on the New York market on Oct. 17 while natural gas prices also dropped to settle at $3.24/MMbtu. Gas prices have stayed near or above $3/MMbtu since about mid-September.
Nicholas Potter, Barclays analyst in New York, said he believes oil and gas company budgets will show a continued “clear preference for oil and wet gas plays” in 2017.
Potter said, “A depleting inventory of drilled but uncompleted wells in the Northeast and tightening gas balances heading into 2017 will beg the question of when rigs will come back to work in dry gas plays.”
Bob Dudley, BP PLC chief executive officer, told the Oil & Money Conference in London on Oct. 18 that gas will play an increasing role in electric power generation worldwide in coming years.
“For the next few decades, oil and gas can remain the dominant form of energy powering the global expansion, and we’ll see less coal and more gas,” Dudley said. “Last year, gas use grew 1.7% while coal declined by 1.8%—the largest fall on record.”
The natural gas contract for November declined 4¢ to a rounded $3.24/MMbtu. On the spot market, the Henry Hub gas price rose 3¢ to $3.16/MMbtu.
Heating oil for November fell 1¢ to a rounded $1.56/gal. The price for reformulated gasoline stock for oxygenates blending for November edged down less than 1¢ to remain at a rounded $1.49/gal.
The December Brent crude contract on London’s ICE fell 43¢ to settle at $51.52/bbl, and the January contract decreased 40¢ to settle at $52.24/bbl. The November gas oil contract settled at $458.50/tonne, down $2.75.
The average price for OPEC’s basket of benchmark crudes on Oct. 17 was $48.22/bbl, down 41¢.
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