Light, sweet crude oil prices dropped 70¢ on New York market to settle below $48/bbl June 2 while the Brent crude oil price for August delivery fell by more than 80¢ on the London market to settle under $50/bbl.
Oil prices rose in early trading on June 5 after Saudi Arabia and three other countries cut diplomatic ties with Qatar. Oil traders are sensitive to Middle East tensions because they worry about possible oil supply disruptions.
Qatar is a small producer compared with its neighbors. Egypt, Bahrain, and the UAE joined Saudi Arabia in cutting diplomatic ties with Qatar on June 5, accusing Qatar of backing terrorism.
Qatar’s dispute with its Middle East allies could complicate politics among members of the Organization of Petroleum Exporting Countries, some analysts noted. Saudi Arabia accuses Qatar of supporting Iran although Qatar denied it, Dow Jones Newswires reported.
On both New York and London markets, oil prices fell overall last week. Analysts said investors were disappointed that OPEC members did not agree to increase production-cut targets at a meeting on May. 25.
OPEC and some non-OPEC countries extended existing targets through first-quarter 2018 in efforts to reduce ample world oil supplies and support oil prices.
The July light, sweet crude contract on the New York Mercantile Exchange fell 70¢ to $47.66/bbl on June 2. The August contract also fell 73¢ to close at $47.87/bbl.
The natural gas price for July dropped less than 1¢ to a rounded $2.99/MMbtu. The Henry Hub cash gas price was $2.84/MMbtu, down 9¢.
Heating oil for July dropped nearly 2¢ to a rounded $1.48/gal. Reformulated gasoline stock for oxygenate blending for July fell 2¢ to $1.58/gal.
The Brent crude contract for August on London’s ICE dropped 88¢ to $49.95/bbl on June 2. The September contract fell 73¢ to $50.24/bbl.
The June gas oil contract was $438.50/tonne on June 2, down $7.
The price of OPEC’s basket of crudes on June 2 was not immediately available.
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