OIL PRICES DOWN TO $26
The price for light, sweet crude oil for March delivery dropped more than $1 on the New York market Feb. 11 to settle at $26.21/bbl, the lowest settlement since May 6, 2003. But oil prices appeared to be climbing in early trading on Feb. 12 after news reports of comments about possible production cuts.
Late on Feb. 11, UAE Energy Minister Suhail bin Mohammed al-Mazrouei reportedly said the Organization of Petroleum Exporting Countries is open for a discussion on possible reductions in output.
Meanwhile, Venezuela proposed that OPEC and non-OPEC producers could freeze production at current levels. Many traders and analysts remained skeptical that any such agreement could be reached.
"An OPEC cut is still hard to see, but this week the notion of an OPEC freeze was introduced, and we find that easier to envisage," said Olivier Jakob of Petromatrix.
Jakob said the proposed OPEC production freeze would not immediately reduce oil supplies to world markets but that any sign of OPEC supply management could provide sentimental support.
The March crude oil contract on NYMEX dropped $1.24 to settle at $26.21/bbl on Feb. 11. The April contract declined 83¢ to $28.83/bbl.
The NYMEX natural gas contract for March dropped 52¢ to a rounded $1.99/MMbtu. The Henry Hub gas price was down 1¢ to $2.12/MMbtu on Feb. 11.
Heating oil for March delivery edged up less than a penny to remain at a rounded 98¢/gal. The price for reformulated gasoline stock for oxygenates blending for March also held steady at a rounded 94¢/gal on Feb. 11.
The April ICE contract for Brent crude dropped 78¢ to $30.06/bbl on Feb. 11, and the May contract declined 72¢ to settle at $30.78/bbl. The ICE gas oil contract for March was $285.50/tonne, up 25¢.
The average price for OPEC's basket of 12 benchmark crudes was $25.21/bbl, down 72¢.
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REUTERS - Brent crude futures LCOc1 were down 72 cents at $61.49 per barrel at 1020 GMT, having fallen by 1.5 percent on Tuesday, its largest one-day drop in a month. U.S. West Texas Intermediate (WTI) crude CLc1 was at $55.12 per barrel, down 58 cents.
BLOOMBERG - Prices dropped during the session as the International Energy Agency said the recent recovery in oil prices, coupled with milder-than-normal winter weather, is slowing demand growth. The worsening outlook for consumption dampened some of the enthusiasm that OPEC and its allies will extend supply curbs.
Global energy needs rise more slowly than in the past but still expand by 30% between today and 2040. This is the equivalent of adding another China and India to today’s global demand.
Product exports have grown significantly over the past several years and are expected to continue to grow as Russian refineries add capacity to produce more high-quality products.