Light, sweet crude oil prices dropped slightly by the Oct. 14 settlement to end a volatile week in which the US Energy Information Administration said the country’s commercial crude oil supplies, excluding the Strategic Petroleum Reserve, rose an estimated 4.9 million bbl (OGJ Online, Oct. 13, 2016).
Analysts noted that oil prices still ended the week up slightly more than 1% from where they started. It was the fourth consecutive week of gains for crude oil prices on the New York market, marking the longest sustained price increase since April.
Baker Hughes Inc. reported the US oil and gas drilling rig count jumped 15 units to 539 for the week ended Oct. 14. The overall rig count was up 135 units since May 27 (OGJ Online, Oct. 14, 2016).
Miswin Mahesh of Barclays in London said the Organization of Petroleum Exporting Countries faces a changing market-share situation as it attempts to draw individual OPEC member contributions for its proposed production cut to 32.5-33 million b/d.
“Output from Angola is lower in the fourth quarter, due to maintenance. Venezuela, Algeria, and Qatar are facing decline rates, while Nigeria and Libya are seeing a transient recovery in output,” Mahesh said. “Iraq is increasing its rhetoric on boosting production.”
He said, “The watermark for individual country market share is clearly changing…compared with September when OPEC members’ market share looked different. The relative change makes drawing the individual country contributions even more challenging, in our view.”
OPEC announced a proposed production cut in September at a meeting in Algeria, saying a final decision will be made at its Nov. 30 meeting in Vienna.
The natural gas contract for November dropped nearly 6¢ to a rounded $3.28/MMbtu. On the spot market, the Henry Hub gas price dropped 3¢ to $3.13/MMbtu.
Heating oil for November fell 1¢ to a rounded $1.57/gal. The price for reformulated gasoline stock for oxygenates blending for November gained 1¢ to a rounded $1.49/gal.
The December Brent crude contract on London’s ICE fell 8¢ to settle at $51.95/bbl, and the January contract decreased 6¢ to settle at $52.64/bbl. The November gas oil contract settled at $461.25/tonne, down $4.50.
The average price for OPEC’s basket of benchmark crudes on Oct. 14 was $48.63/bbl, up 56¢.
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