US light, sweet crude oil prices on the New York Mercantile Exchange appear to be headed for their fourth consecutive weekly decline despite some modest increases on June 16. It would mark the longest weekly losing streak in about 2 years.
The week was headlined by light, sweet crude settling at its lowest price since November 2016—just before the initial agreement between the Organization of Petroleum Exporting Countries and non-OPEC producers to collectively curtail output by about 1.8 million b/d in an effort to relieve the global oil supply glut.
Traders have shown a lack of confidence that the extended deal between the parties through March 2018 will move the market back into balance. Their concerns were heightened this week by reports from the US Energy Information Administration and the International Energy Agency that forecast increased US production and lingering excess inventories (OGJ Online, June 12, 2017; June 14, 2017).
EIA data this week showed yet another weekly rise in US production, up 12,000 b/d last week to 9.33 million b/d, and another modest decrease in crude stockpiles alongside an increase in gasoline inventories (OGJ Online, June 14, 2017).
In its own oil market report released this week, OPEC said its May output rose 336,100 b/d to 32.1 million b/d in the cartel’s largest monthly increase since last November. Nigeria and Libya, both exempt from the production agreement, together gained 350,000 b/d last month.
Market observers now await Baker Hughes Inc.’s latest tally of active drilling rigs in the US, set for release midday June 16. An indicator of future production movement, the rig count has increased in 21 straight weeks as part of a drilling rebound that stretches back to May 2016 (OGJ Online, June 9, 2017).
The July light, sweet crude contract on NYMEX fell 27¢ on June 15 to $44.46/bbl. The August contract declined 25¢ to close at $44.68/bbl.
The NYMEX natural gas price for July jumped 12.3¢ to a rounded $3.06/MMbtu. The Henry Hub cash gas price was $2.92/MMbtu, up 2¢.
Heating oil for July edged up less than a penny to a rounded $1.46/gal. Reformulated gasoline stock for oxygenate blending for July also edged up less than a penny and settled a rounded $1.44/gal.
The Brent crude contract for August on London’s ICE dropped 8¢ to $46.92/bbl, while the September contract lost 10¢ to $47.19/bbl. The July gas oil contract gained 25¢ to $419/tonne.
OPEC’s basket of crudes on June 15 was $44.38/bbl, down 78¢.
Contact Matt Zborowski at firstname.lastname@example.org.