MARKET WATCH: Crude prices slide on strengthening dollar, abundant world supply

Crude oil prices on the New York and London markets declined May 18 and early May 19 as the US dollar gained 1% vs. a basket of major currencies and reports indicated that oil exports from Saudi Arabia in March reached their highest level since 2005.

The kingdom exported 7.898 million b/d during the month compared with 7.35 million b/d in February, according to data from the Joint Organizations Data Initiative. News of ample supply from the Middle East offset concerns about turmoil in Iraq and Yemen (OGJ Online, May 18, 2015).

Analysts, meanwhile, cautioned that the recent rebound in crude prices may be short-lived because of oversupply from the Middle East as well as the US, where the rig count is shrinking and production remains at record levels (OGJ Online, May 15, 2015). According to a report from Reuters, Goldman Sachs reduced its Brent forecast to $60-65/bbl for 2016-19 and $55/bbl for 2020.

The June crude oil contract on the New York Mercantile Exchange lost 26¢ on May 18 to settle at $59.43/bbl. The July contract dropped 30¢ to settle at $60.24/bbl.

The natural gas contract for June edged down by less than a penny to $3.01/MMbtu. The Henry Hub, La., gas price was $3.01/MMbtu, up 5¢.

Heating oil for June edged down 1.8¢ a rounded $1.99/gal. The price for reformulated gasoline stock for oxygenates blending for June increased 1.57¢ to a rounded $2.04/gal.

The July and August ICE contracts for Brent crude each declined 54¢ to $66.27/bbl and $66.75/bbl, respectively. The ICE gas oil contract for June dropped $2.25 to $608.75/tonne.

The average price for the OPEC’s basket of 12 benchmark crudes for May 18 was $62.98/bbl, up 24¢.