MARKET WATCH: Crude oil benchmark prices recover on OPEC report
Brent crude for April delivery rose by nearly $1/bbl on the London market Feb. 12 following a report that the Organization of Petroleum Exporting Countries reduced oil production in January by 797,000 b/d compared with December 2018.
OPEC reported its January production at 30.81 million b/d. Saudi Arabia Energy Minister Khalid al-Falih on Feb. 12 told the Financial Times that Saudi production would fall below 10 million b/d in March—more than 500,000 b/d below its production-cut agreement.
Saudi production for January was estimated by 10.2 million b/d, OPEC said in its Monthly Oil Market Report (OGJ Online, Feb. 12, 2019).
Goldman Sachs analysts said US sanctions on Venezuela oil imports threaten to remove some 330,000 b/d from world oil markets during 2019. In addition to sanctions, US President Donald Trump recognizes National Assembly leader Juan Guaido as Venezuela’s interim president rather than President Nicolas Maduro.
OPEC’s secondary sources estimated Venezuela oil production fell by 59,000 b/d in January from December to a total of 1.1 million b/d for January. Barclays Research analysts note Venezuelan crude oil production is rapidly falling given US sanctions.
“Without a solution to this impasse within days, we believe the country could be on a path to a fully anarchic situation that, if not rapidly tackled, could compromise the country’s economic capacity to recover,” Barclays’ analysts said in a Feb. 12 research note. “Oil storage capacity could be exhausted in less than a month, exacerbating production shutdowns.”
Energy prices
The March contract for light, sweet crude oil on the New York Mercantile Exchange increased 69¢ to settle at $53.10/bbl on Feb. 12. The contract for April delivery also gained 69¢ to settle at $53.47/bbl.
NYMEX natural gas for March rose 4.6¢ to a rounded $2.69/MMbtu on Feb. 12.
Ultralow-sulfur diesel for March gained 1.5¢ to a rounded $1.91/gal. The NYMEX reformulated gasoline blendstock for March increased by just under a penny to a rounded $1.43/gal.
Brent crude for April delivery gained 91¢ to settle at $62.42/bbl while the May contract increased 88¢ to settle at $62.40/bbl. The gas oil contract for February held unchanged at $582.50/tonne on Feb. 12.
The average price for OPEC’s basket of crudes was $61.88/bbl on Feb. 12, up 48¢.
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.
