Light, sweet crude oil prices gained modestly to settle at $50.85/bbl for the December contract on the New York market Oct. 21, but prices were staying flat on Oct. 24 after Iraqi oil officials said they expect to be excluded from a proposed production cut by the Organization of Petroleum Exporting Countries.
Iraq officials said Oct. 23 that they have no plans to reduce production, currently estimated at 4.77 million b/d. OPEC members are scheduled to meet Nov. 30 to discuss individual member country production quotas in efforts to restrict the cartel’s production to under 33 million b/d.
“There is a risk that Iraq’s refusal could trigger a domino effect that other producers would ask to be exempt from the cuts too,” Gao Jian, energy analyst at SCI International, told the Wall Street Journal.
Iran, Libya, and Nigeria already are expected to be exempt from any proposed production cut.
US natural gas futures and cash prices tumbled in Oct. 21 trading. Gas futures in New York dropped below $3/MMbtu.
Barclays analysts said gas prices “hit a wall” because the fourth quarter started with warm weather and because gas storage levels are high.
“We expect further weakness in prices—assuming no unexpected cold weather—driven by a focus on storage levels approaching the bearish psychological mark of 4,000 bcf,” Barclays' Michael Cohen in New York said in a research note. “We would view further weakness as a buying opportunity for calendar 2017.”
The natural gas contract for November dropped a rounded 1.5¢ to a rounded $2.99/MMbtu. On the spot market, the Henry Hub gas price plunged 22¢ to $2.87/MMbtu.
Heating oil for November gained 1¢ to a rounded $1.57/gal. The price for reformulated gasoline stock for oxygenates blending for November jumped by nearly 4¢ to a rounded $1.53/gal.
The December Brent crude contract on London’s ICE gained 40¢ to settle at $51.78/bbl, and the January contract increased by 44¢ to settle at $52.69/bbl. The November gas oil contract settled at $464.50/tonne, up $2.75.
The average price for OPEC’s basket of benchmark crudes on Oct.21 was $48.08/bbl, down 43¢.
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