The light, sweet crude oil contract for February delivery fell more than $2/bbl on the New York market Jan. 9 as did the Brent crude oil contract price for March delivery on the London market. It was the largest daily loss for the US and Brent benchmarks in about 3 weeks.
Analysts attributed the price plunge to concerns about lingering world oversupply of oil. News reports indicated high crude volumes coming from Iraq and Iran, which could undermine an agreement to cut production by the Organization of Petroleum Exporting Countries and some non-OPEC producers.
ClipperData reported Iran’s floating storage was cut to 17 million bbl currently from 32.5 million bbl in September.
Commerzbank issued a Jan. 9 research note citing Iraq’s December record crude exports of 3.5 million b/d from Basra as an example of the difficulties for OPEC members to actually cut production as agreed. Iraq’s government officials said they still will comply with OPEC’s expectations this month.
US natural gas futures also fell drastically on forecasts calling for warmer weather across much of the country. Gas futures had soared earlier on extreme cold in early January.
But forecasters are calling for cold temperatures to end abruptly this week with unusually warm winter temperatures likely reaching into late January for much of the country. Natural gas for February delivery settled at $3.10/MMbtu on the New York market, down 18¢ to the lowest gas settlement since Nov. 25.
The February crude oil contract on the New York Mercantile Exchange declined $2.03 on Jan. 9 to close at $51.96/bbl. The March contract fell $2 to $52.87/bbl.
The Henry Hub spot natural gas price closed at $3.12/MMbtu, down 20¢.
Heating oil for February declined 6¢ to a rounded $1.64/gal. Reformulated gasoline stock for oxygenate blending for February fell 6¢ to a rounded $1.57/gal.
The Brent crude contract for March on London’s ICE was down $2.16 to $54.94/bbl. The April contract decreased $2.12 to $55.56/bbl. Gas oil for January closed Jan. 9 at $483/tonne, down $10.25.
The average price for OPEC’s basket of benchmark crudes for Jan. 9 was $52.85/bbl, down 65¢.
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