Crude oil prices gained modestly on markets in New York and London on Oct. 27 while analysts await the weekly US rig count from Baker Hughes Inc. and also any indications for the Organization of Petroleum Exporting Countries regarding a proposed production cut.
“The market is going to be in a bit of limbo between now and Nov. 30,” Amrita Sen, Energy Aspects oil analyst, told the Wall Street Journal.
Iraqi oil officials have been working toward getting an exemption from any quota revision. Iran, Nigeria, and Libya reported already that they were exempted from reduced OPEC quotas because they are attempting to rebuild production following previous output interruptions.
Consequently, there has been some talk about OPEC members settling on a production freeze at existing levels rather than initiating cuts in production quotas. OPEC members in September proposed cutting production quotas. Talks about that are ongoing, but no final decision is expected until the OPEC meeting.
“If they will fail to deliver in November, the market will sell off very hard and I think they know that,” Sen said. “They can’t keep kicking the can down the line.”
Regarding US natural gas in underground storage across the Lower 48, the US Energy Information Administration estimated levels at 3.909 tcf for the week ended Oct. 21, a net increase of 73 bcf.
The Gas Storage Report said that total represented a net increase of 73 bcf from the previous week. Stocks were 52 bcf higher than last year at this time.
The natural gas contract for November climbed 3¢ to a rounded $2.76/MMbtu. On the spot market, the Henry Hub gas price gained 1¢ to $2.69/MMbtu.
Heating oil for November rose nearly 2¢ to a rounded $1.57/gal. The price for reformulated gasoline stock for oxygenates blending for November gained less than 1¢ to a rounded $1.49/gal.
The December Brent crude contract on London’s ICE rise 49¢ to settle at $50.47/bbl. The Brent contract for January was up 56¢ to $51.60/bbl. The November gas oil contract settled at $465/tonne, up $3.25.
The average price for OPEC’s basket of benchmark crudes on Oct. 27 was $47.23/bbl, up 27¢.
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