MARKET WATCH: NYMEX, Brent crude prices gain moderately

Light, sweet crude oil prices gained modestly to hold above $45/bbl on the New York market Nov. 9 while Brent crude oil prices held above $46/bbl in London as market participants considered Donald J. Trump’s surprise defeat of Hillary Clinton for the US presidency (OGJ Online, Nov. 9, 2016).

The International Energy Agency’s Monthly Oil Market report showed the Organization of Petroleum Exporting Countries produced a record 33.83 million b/d during October, marking an increase of 230,000 b/d.

Production recovered in Nigeria and Libya while Iraqi production reached a record, the report said.

“Output from the group’s 14 members has climbed for 5 months running, led by Iraq and Saudi Arabia in October,” IEA said. “OPEC supply stood nearly 1.3 million b/d above a year ago.”

Analysts noted the record production casts increasing doubt on OPEC’s ability to implement a proposed cut in the cartel’s production quotas at its Nov. 30 meeting. In September, OPEC said it would examine ways to cap the group’s production at 32.5-33 million b/d.

“The IEA didn’t change its forecast in terms of global oil demand, so the growth outlook is fairly lackluster at around 1.2-1.3 million b/d,” Harry Tchilinguirian, BNP Paribas SA commodity strategy head, told the Wall Street Journal.

“The issue of excess supply that permeates markets currently is going to extend into next year,” Tchilinguirian said.

Regarding US crude oil supplies, the US Energy Information Administration said commercial crude inventories, excluding the Strategic Petroleum Reserve, increased 2.4 million bbl for the week ended Nov. 4 to a total 485 million bbl (OGJ Online, Nov. 9, 2016).

The EIA’s Petroleum Status Report estimated US production reached 8.692 million b/d for the week ended Nov. 4, up 170,000 b/d from the previous week. The Lower 48 contributed 8.175 million b/d. up 163,000 b/d, while Alaska production accounted for the rest, up 7,000 b/d from the previous week.

Energy prices

The December crude oil contract on the New York Mercantile Exchange gained 29¢ on Nov. 9 to close at $45.27/bbl. The January contract gained 33¢ to $45.94/bbl.

The natural gas contract for December added nearly 6¢ to a rounded $2.69/MMbtu. On the spot market, the Henry Hub gas price dropped 10¢ to $2.22/MMbtu.

Heating oil for December held unchanged at $1.44/gal while the January contract was down a fraction of a penny to $1.46/gal. The price for reformulated gasoline stock for oxygenates blending for December dropped 1¢ to remain at a rounded $1.36/gal.

The January Brent crude contract on London’s ICE rose 32¢ to settle at $46.36/bbl. The Brent contract for February gained 24¢ to $47.42/bbl. The November gas oil contract declined 25¢ to $419.50/tonne.

The average price for OPEC’s basket of benchmark crudes on Nov. 9 was down 32¢ to $41.90/bbl.

Contact Paula Dittrick at paulad@ogjonline.com.

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