Benchmark crude oil prices rose slightly on markets in New York and London Jan. 19 on indications that major producers are making progress toward cutting production in their effort to rebalance oil supply and demand worldwide.
The International Energy Agency said Jan. 19 that production has slowed from the Organization of Petroleum Exporting Countries, declining 320,000 b/d to 33.09 million b/d in December 2016. IEA said OPEC production likely will fall more steeply during January.
IEA also said early indications suggest OPEC countries will fulfill the organization’s agreement to cut production by 1.2 million b/d during this year’s first half.
OPEC’s Monthly Oil Market Report said secondary sources estimate the cartel produced nearly 33.1 million b/d in December 2016, down 221,000 b/d from November. The group needs to cut production to about 31.8 million b/d to meet the level it promised for this year.
OPEC and some non-OPEC producers agreed to trim output in hopes of draining record higher world oil supplies (OGJ Online, Jan. 19, 2017).
US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 2.3 million bbl for the week ended Jan. 13 compared with the previous week, said the US Energy Information Administration’s weekly inventory report. The latest total estimate was 485.5 million bbl (OGJ Online, Jan. 19, 2017).
The Petroleum Status Report for the week ended Jan. 13 estimated US production at 8.9 million b/d, down 2,000 b/d from the previous week. Production held unchanged across the Lower 48 at 8.43 million b/d while Alaska production dropped 2,000 b/d to 513,000 b/d.
The NYMEX crude oil contract for February delivery on the New York Mercantile Exchange settled up 29¢ to $51.37. The February contract expired with the end of Jan. 19 trading. The March crude oil contract rose 23¢ to $52.12/bbl.
US natural gas futures for February delivery climbed 6.6¢ to $3.37/MMbtu. The Henry Hub spot gas price closed at $3.21/MMbtu, down 4¢.
Heating oil for February edged up nearly 1¢ on Jan. 19 to a rounded $1.62/gal. Reformulated gasoline stock for oxygenate blending for February dropped 1.4¢ to $1.53/gal.
The Brent crude contract for March on London’s ICE settled up 24¢ to $54.16/bbl. The April contract settled up 28¢ to $54.69/bbl. Gas oil for February closed Jan. 19 at $479.50/tonne, down $6.25.
The average price for OPEC’s basket of benchmark crudes was $51.45/bbl, down 77¢.
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