Crude oil benchmark prices gained modestly on the New York market to settle Dec. 13 at nearly $53/bbl. Traders said trading was choppy late in the trading session for 2 consecutive days, suggesting market participants have turned their attention from world production levels to US oil inventories.
The US Energy Information Administration was scheduled Dec. 14 to release its weekly oil and products inventory.
Olivier Jakob, Petromatrix analyst, said a preliminary estimate from the American Petroleum Institute showed US crude stocks rose 4.7 million bbl for the week ended Dec. 9 compared with the previous week.
The Organization of Petroleum Exporting Countries has agreed to cut production by 1.2 million b/d starting Jan. 1, 2017, and some non-OPEC countries have agreed to cut production by 558,000 b/d (OGJ Online, Dec. 13, 2016).
Prices had rallied since the OPEC decision on Nov. 30. But the rally appears to have slowed. Some have suggested that US shale production could increase quickly, which could offset OPEC’s efforts to reduce oil storage levels worldwide. Lower crude supplies would support oil prices (OGJ Online, Dec. 12, 2016).
“OPEC has set a target price of between $55-60/bbl for oil,” said Jakob. “It is now at the lower levels of that target. However, it will struggle to sustain itself at $60/bbl unless the stocks start to come down.”
Separately, US President-elect Donald J. Trump has selected ExxonMobil Corp. Chief Executive Officer Rex Tillerson for secretary of state and former Texas Gov. Rick Perry as energy secretary. Trump gets sworn into office on Jan. 20, 2017.
The natural gas contract for January was down 3¢ to a rounded $3.47/MMbtu. The Henry Hub spot market for gas closed at $3.60/MMbtu, up 3¢.
Heating oil for January edged up less than 1¢ to remain at a rounded $1.67/gal. Reformulated gasoline stock for oxygenate blending for January rose less than a penny to a rounded $1.55/gal.
The Brent crude contract for February on London’s ICE was up 3¢ to $55.72/bbl. The March contract increased 2¢ to $56.39/bbl. Gas oil for January closed Dec. 13 at $490/tonne, down $1.
The average price for OPEC’s basket of benchmark crudes for Dec. 13 was $52.39/bbl, down 85¢.
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