The light, sweet crude oil price for the December contract dropped modestly to settle below $45/bbl on Nov. 3 while market participants continued to increasingly doubt that Organization of the Petroleum Exporting Countries will be able to reach a deal to cut production.
The next OPEC meeting is scheduled Nov. 30 in Vienna. OPEC members agreed in September to try and reach agreement on a reduction in individual member’s production quotas. Some countries, Libya, Nigeria, and Iraq, have said they want to be exempted.
High US crude oil inventory levels also sent oil prices lower this week. The Energy Information Administration reported US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 14.4 million bbl for the week ended Oct. 28 (OGJ Online, Nov. 2, 2016).
In addition, US total production was estimated at 8.52 million b/d for the week ended Oct. 28, up 18,000 b/d from the previous week (OGJ Online, Nov. 3, 2016).
Barclays issued an outlook note saying its analysts remain constructive regarding oil prices for the next 2 quarters. Barclays forecast Brent will average $52/bbl for the fourth quarter while the US benchmark will average $51.
For first-quarter 2017, Barclays analysts forecast an average Brent price of $57/bbl and a US benchmark price of $55/bbl. Analysts said markets need no more than 33 million b/d of OPEC oil until the second half of 2017.
Barclays analysts said global oil demand is expected to grow 1.3 million b/d during 2017.
The natural gas contract for December declined 2¢ to a rounded $2.77/MMbtu. On the spot market, the Henry Hub gas price rose 9¢ to $2.36/MMbtu.
Heating oil for December edged down less than a penny to remain at a rounded $1.46/gal. The price for reformulated gasoline stock for oxygenates blending for December declined 2¢ to a rounded $1.42/gal.
The January Brent crude contract on London’s ICE was down 51¢ to settle at $46.35/bbl. The Brent contract for February was down 47¢ to $47.22. The November gas oil contract held steady at $422.50/tonne.
The average price for OPEC’s basket of benchmark crudes on Nov. 3 was $42.65, down 47¢.
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