Light, sweet crude oil prices rose modestly on the New York market Sept. 30 while Brent crude oil for November delivery dropped. The Brent contract for December delivery rose to settle above $50/bbl in mixed trading to end a volatile week.
Some analysts said market participants see overall optimism regarding possible future actions by the Organization of Petroleum Exporting Countries. OPEC agreed to consider cutting production during a meeting in Algeria on Sept. 28. The cartel is slated to meet in Vienna Nov. 30.
Matt Cook of Douglas-Westwood London said the cartel might have difficulty in setting production quotas.
“Saudis and Iranians had seemingly put aside their differences for the benefit of the entire industry,” Cook noted, but he still foresees some hurdles to a move to cut production.
“Firstly, Iraq’s delegation is hotly disputing OPEC’s estimate for its crude production,” Cook said. OPEC estimates Iraq’s August crude output at 4.35 million b/d, more than 300,000 b/d less than Iraq’s own estimates. “Therefore, any shared OPEC strategic output cut would hurt Iraq considerably.”
Cook also said, “The real numbers behind the output reduction are significantly larger than face value.”
Separately, Jenna Delaney, director of Platts Analytics’ Oil and Gas Consulting Services, will Platts expects Brent crude oil prices will average $48/bbl during the fourth quarter and $51/bbl during 2017.
“We expect US production to trough in mid-2017,” Delaney said.
The US drilling rig count jumped 11 units to 522 rigs working for the week ended Sept. 30, Baker Hughes Inc. reported (OGJ Online, Sept. 30, 2016).
The natural gas contract for November dropped 5¢ to a rounded $2.90/MMbtu. On the spot market, the Henry Hub gas price declined 11¢ to $2.84/MMbtu.
Heating oil for October gained nearly 2¢ to a rounded $1.53/gal. The price for reformulated gasoline stock for oxygenates blending was up 2¢ to a rounded $1.49/gal.
The November Brent crude contract on London’s ICE decreased 18¢ to settle at $49.06/bbl and the December contract climbed 38¢ to settle at $50.19. The October gas oil contract settled at $446.75/tonne, up $2.
The average price for OPEC’s basket of benchmark crudes on Sept. 30 was $44.63, up 29¢.
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