MARKET WATCH: NYMEX February contract settles below $51/bbl

The light, sweet crude oil contract for February delivery dropped more than $1/bbl on the New York market Jan. 10, but prices were trading higher on early Jan. 11 pending release of the weekly US oil and products report.

On world oil markets, Libyan militias reportedly struck deals to allow the country’s National Oil Co. to reopen important petroleum-producing systems, the Wall Street Journal reported Jan. 10.

Libya’s production rose to a 3-year high of 708,000 b/d this week, an NOC spokesman said. NOC believes it could reach production of 900,000 b/d during 2017.

The Organization of Petroleum Exporting Countries and other major producers have agreed to cut production levels this year. But actual January production will not be known until mid-February when OPEC releases its January production statistics.

The US Energy Information Administration was scheduled to release the latest US crude inventory level Jan. 11.

The American Petroleum Institute said late Jan. 10 that its own estimate showed a 1.5 million-bbl increase in crude supplies for the week ended Jan. 6. Regarding US production levels, the Department of Energy expects US crude production will average 9 million b/d in 2017. EIA said that US production was 8.8 million b/d for the week ended Dec. 30, 2016.

Energy prices

The February crude oil contract on the New York Mercantile Exchange declined $1.14 on Jan. 10 to close at $50.82/bbl. The March contract fell $1.17 to $51.70/bbl.

The NYMEX natural gas price for February rose 17.5¢ to $3.28/MMbtu, regaining nearly all of its loss from the previous trading session. Henry Hub spot natural gas price closed at $3.21/MMbtu, up 9¢. US gas futures prices fell sharply Jan. 9 upon forecasts for warmer-than-normal winter weather.

Heating oil for February declined by nearly 3¢ on Jan. 10 to a rounded $1.61/gal. Reformulated gasoline stock for oxygenate blending for February fell 2¢ to a rounded $1.55/gal.

The Brent crude contract for March delivery on London’s ICE was down $1.30 to $53.64/bbl. The April contract decreased $1.30 to $54.26/bbl. Gas oil for January closed Jan. 10 at $472.75/tonne, down $10.25.

The average price for OPEC’s basket of benchmark crudes for Jan. 10 was $51.46/bbl, down $1.39.

Contact Paula Dittrick at paulad@ogjonline.com.

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