OIL PRICES UP TO $47
Light, sweet crude prices gained more than $1.50/bbl on the New York market May 11, setting a new high settlement for 2016 at $46.23/bbl, which analysts attributed to a surprise drop in the estimated weekly crude oil inventory.
The May 11 settlement was the highest front-month close for an oil contract on the New York market since Nov. 4, 2015.
Oil prices jumped after the Energy Information Administration said US crude oil supplies dropped 3.4 million bbl for the week ended May 6 to a total of 540 million bbl.
The Petroleum Status Report showed crude inventories fell. US oil production levels continued slowly dropping. EIA estimated that US crude production fell slightly last week to 8.8 million b/d, the lowest level since September 2014.
The May 6 production level was down 23,000 b/d from the previous week. Compared with a year ago, weekly US production as of May 6 was down 532,000 b/d from the same period during 2015, EIA noted.
The agency's US crude oil production estimate includes lease condensate and is calculated using a combination of short-term forecasts for the Lower 48 and the latest available production estimates from Alaska.
Regarding natural gas in underground storage across the Lower 48, EIA estimated levels at 2.68 tcf as of May 6, which was a net increase of 56 bcf from the previous week. Stocks were 816 bcf higher than last year at this time, the Gas Storage Report said.
Separately, S&P Global Platts said its survey shows oil production from the Organization of Petroleum Exporting Countries soared 140,000 b/d during April compared with March. Platts estimated the April OPEC total production at 32.52 million b/d, adding that its calculations show Iran and Iraq each ramped up production by 150,000 b/d during April.
The July crude oil contract on the New York Mercantile Exchange gained $1.66 to $47.01/bbl.
US natural gas futures gained while the spot price fell. The NYMEX contract for June delivery gained 1.5¢ to a rounded $2.17/MMbtu. The Henry Hub price was $2.01/MMbtu, down 3¢.
Heating oil for June delivery rose nearly 6¢ to a rounded $1.40/gal. The price for reformulated gasoline stock for oxygenates blending for June gained 10¢ to a rounded $1.58/gal.
The Brent crude contract for July on London's ICE jumped $2.08 to $47.60/bbl. The August contract climbed $2.02 to $48.03/bbl. The May gas oil contract was $414/tonne, up $20.75.
OPEC's basket of crudes reached $41.40/bbl, up $1.20.
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.