Light, sweet crude oil prices on the New York Mercantile Exchange fell to a new 2017 low in early June 20 trading, which analysts attributed to lingering doubts about major oil producers’ ability to reduce world oil supplies with production-cut targets as promised.
The US light, sweet crude for July delivery traded at $43.40/bbl shortly after the market opened on June 20 while the Brent contact for August fell to $46.16/bbl on London’s ICE Futures Europe during mid-day trading.
Oil prices also fell on June 19 as both the New York and London oil markets maintain a downward trend since the Organization of Petroleum Exporting Countries and other major producers extended production-cut targets through the first quarter of 2018.
The downward trend has lasted almost a month since production-cut targets of 1.8 million b/d were extended. OPEC wants to reduce world oil oversupply in efforts to support oil prices but oil inventories still remain high.
US oil production is on the increase as is production from OPEC member Libya, exempted from the production-cut target agreement. Libya almost has reached its short-term production goal of 900,000 b/d, Commerzbank analysts said.
Standard Chartered PLC analysts believe oil storage will fall during the second half of 2017. Emily Ashford, director of Standard Chartered energy research, noted the market currently appears determined to decline. “It doesn’t even matter if there is any positive data.”
“There is a disconnect between the actual data coming out and what the markets think,” Ashford told the Wall Street Journal.
The July light, sweet crude contract on NYMEX fell 54¢ on June 19 to settle at $44.20/bbl. The August contract decreased 54¢ to close at $44.43/bbl.
The NYMEX natural gas price for July dipped by 14¢ to a rounded $2.89/MMbtu. The Henry Hub cash gas price was $2.86/MMbtu, down 10¢.
Heating oil futures fell 1.6¢ to a rounded $1.41/gal. Reformulated gasoline stock for oxygenate blending for July edged down less than a penny to $1.45/gal.
The Brent crude contract for August on London’s ICE declined by 46¢ to $46.91/bbl while the September contract was down 50¢ to $47.13/bbl. The July gas oil contract gained $1 to $424/tonne.
OPEC’s basket of crudes on June 19 was $44.46/bbl, down 12¢.
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