Light, sweet crude oil prices for March settled at $53.86/bbl on the New York market Feb. 10, up 86¢ after the International Energy Agency said world crude supply dropped by 1.5 million b/d in January from December.
The Organization of Petroleum Exporting Countries along with some non-OPEC producers agreed to cut their cumulative production by 1.8 million b/d. Those cuts started in January.
IEA estimated OPEC’s January production fell about 1 million b/d to 32.06 million b/d from October 2016.
OPEC issued its own report Jan. 13 that cartel production fell by 890,000 b/d in January compared with December. Secondary sources estimated OPEC production in January averaged 32.139 million b/d compared with 33.029 million b/d in December.
Crude oil output decreased the most from Saudi Arabia, Iraq, and the UAE while production from Nigeria, Libya and Iran increased, OPEC’s Monthly Oil Report said.
Libya and Nigeria were both exempted from the cuts. When subtracting their output from the statistics production from participating OPEC members actually fell by 1.032 million b/d in January.
Analysts note that rising non-OPEC supplies from some producing countries could dampen the effectiveness of the agreed production cuts, intended to reduce world oil inventories. IEA expects production from Brazil, Canada, and the US to increase by 750,000 b/d in 2017.
Anthony Starkey, Platts Analytics manager of energy analysis, said, “In the face of sky-high inventories, which have been tremendously bearish for the oil market for the past 2 years, the market continues to hold onto the hope that OPEC’s efforts will prove effective in driving these stock levels down.”
He said it remains to be seen how long it takes for OPEC’s cuts to show up in inventory data. Platts Analytics is part of S&P Global Platts.
Energy prices
The NYMEX crude oil contract for March delivery gained 86¢ on Feb. 10 to $53.86/bbl. The April contract was up 87¢ to $54.33/bbl.
US natural gas futures for March delivery fell nearly 11¢ to a rounded $3.13/MMbtu. The spot gas price at the Henry Hub in Cushing, Okla., declined 7¢ to $2.93/MMbtu.
Heating oil for March climbed 2.4¢ to a rounded $1.67/gal. Reformulated gasoline stock for oxygenate blending for March gained nearly 2¢ to a rounded $1.59/gal.
The Brent crude contract for April on London’s ICE was up $1.07 to $56.70/bbl. The Brent May contract was up $1.06 to $57.06/bbl. Gas oil for March closed at $503.50/tonne, up $9.
The average price for OPEC’s basket of benchmark crudes on Feb. 10 was $53.23/bbl, up 47¢.
Contact Paula Dittrick at [email protected].
Paula Dittrick | Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.