The benchmark for light, sweet crude oil prices on the New York Mercantile Exchange began Jan. 23 on the decline after Baker Hughes Inc.’s latest US rig count rejuvenated oversupply concerns.
Data from BHI released midday Jan. 20 indicated the count of active rigs for the week increased by 35 units, the most since the count jumped by 39 during the week ended Aug. 12, 2011 (OGJ Online, Jan. 20, 2017). Oil-directed rigs increased 29 units to 551, up 235 since May 27.
Earlier in the week, the US Energy Information Administration forecast crude production from the seven major US onshore producing regions to rise 41,000 b/d month-over-month in February (OGJ Online, Jan. 17, 2017).
Worries driven by US activity more than offset optimism from a progress report over the weekend on output limits between members of the Organization of Petroleum Exporting Countries and major nonmember producers in which Saudi Oil Minister Khalid al-Falih said compliance to the agreement has been “very good.”
The producers have together pledged to reduce supply by about 1.8 million b/d beginning in January in an effort to bring the oil market back into balance this year.
The NYMEX crude oil contract for February delivery on the New York Mercantile Exchange gained $1.05 on Jan. 20 to $52.42/bbl. The March crude oil contract rose $1.10 to $53.22/bbl.
US natural gas futures for February delivery fell 16.4¢ to a rounded $3.20/MMbtu. The Henry Hub spot gas price was unchanged at $3.21/MMbtu.
Heating oil for February increased 2.76¢ to a rounded $1.65/gal. Reformulated gasoline stock for oxygenate blending for February was up 3.15¢ to $1.57/gal.
The Brent crude contract for March on London’s ICE rose $1.33 to $55.49/bbl. The April contract was up $1.29 to $55.98/bbl. Gas oil for February closed Jan. 19 at $489.50/tonne, up $10.
The average price for OPEC’s basket of benchmark crudes on Jan. 20 was $51.80/bbl, up 35¢.