Light, sweet crude oil prices for March delivery fell on the New York market Jan. 23 to settle under $53/bbl, but prices climbed in early trading Jan. 24 on reports of a weakening US dollar.
Oil is traded in dollars so a weakening dollar makes oil less expensive for buyers using other currencies.
Commerzbank analysts said protectionist support from US President Donald Trump could boost US unconventional oil production, perhaps eventually leading to another crude oil oversupply situation.
Goldman Sachs analysts have said US oil production could rise this year. Baker Hughes Inc. reports the US rig count is climbing.
“Assuming the US oil rig count stays at the current level, we estimate US oil production would increase by 315,000 b/d between fourth quarter 2016 and fourth quarter 2017 across the Permian, Eagle Ford, Bakken, and Niobrara” plays, Goldman Sachs analysts said in a research note.
Last year, the Organization of Petroleum Exporting Countries and also some non-OPEC producers agreed to cut oil production. The cuts started in January. OPEC will release its January production numbers in February.
Saudi Arabia’s Energy Minister Khalid al-Falih has said the 20 nations that agreed to reduce output are showing “very good compliance.”
Separately, China’s oil demand was 8.59 million b/d in December, up 750,000 b/d from a year ago, the Chinese government estimated. Chinese exports of refined fuels totaled 15.4 million tonnes in 2016, more than double the 2015 fuel exports.
The NYMEX crude oil contract for March delivery on the New York Mercantile Exchange declined 47¢ on Jan. 23 to $52.75/bbl. The April crude oil contract fell 46¢ to $53.53/bbl.
US natural gas futures for February delivery gained nearly 4¢ to a rounded $3.24/MMbtu. The Henry Hub spot gas price dropped 6¢ at $3.15/MMbtu.
Heating oil for February decreased about 2¢ to a rounded $1.63/gal. Reformulated gasoline stock for oxygenate blending for February was up less than a penny to remain at a rounded $1.57/gal.
The Brent crude contract for March on London’s ICE fell 26¢ to $55.23/bbl. The April contract was down 35¢ to $55.63/bbl. Gas oil for February closed Jan. 23 at $485.50/tonne, down $4.
The average price for OPEC’s basket of benchmark crudes on Jan. 23 was $52.10/bbl, up 30¢.
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