OIL PRICES DOWN TO $44.65
OGJ said, light, sweet crude oil prices for August delivery declined nearly 60¢ to close at $44.65/bbl on the New York market July 19 while the Brent contract for September dropped 30¢ to close at $46.66/bbl on the London market pending release of the weekly US government inventory for crude oil and products.
"Given that attention in recent days has been focused more on the oversupply of oil products, it will be almost more important to see how gasoline and distillate stock levels have changed," Commerzbank analysts said in a research note.
Oil price also remained under pressure from a strengthening US dollar. Oil is traded in dollars so a stronger dollar makes oil more expensive for buyers using other currencies.
London's ICE US Dollar Index, which measures the dollar against a basket of six currencies, was up 0.5% to 97.03 as of late July 19, its highest since March. The dollar rose against the euro and the pound.
Barclays Research analysts issued an oil special report July 19 saying conditions and timing remain uncertain for an eventual, sustained oil price recovery.
Meanwhile, oil prices are not yet high enough to encourage sufficient future production even in a low-demand scenario, they said.
"We expect prices to reach $85 by 2019, a year sooner than previously forecast," Barclays said of Brent. "Declining inventories, low spare capacity, the externality of low prices on geopolitical unrest, and the deterioration in liquidity, among other factors, are likely to create more volatility in the future."
Barclays said US unconventional production "makes the supply stack...more responsive to price changes by 2020 but is not a replacement for global production declines or for Saudi spare capacity."
The NYMEX crude oil contract for August fell 59¢ to settle at $44.65/bbl on July 19. The September contract dropped 49¢ to close at $44.45/bbl.
The gas futures contract for August edged up less than a penny to remain at $2.72/MMbtu. The Henry Hub gas price held steady at $2.81/MMbtu on July 19, unchanged from the previous day.
Heating oil for August delivery edged up less than 1¢ to remain at a rounded $1.38/gal. The price for reformulated gasoline stock for oxygenates blending for August dropped 1¢ to a rounded $1.38/gal.
The September Brent crude contract on London's ICE fell 30¢ on July 19 to $46.66/bbl. The contract for October decreased 27¢ to $47.18/bbl. The August gas oil contract settled at $409.25/tonne, up $7.50.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 benchmark crudes was $42.66/bbl on July 19, down 80¢.
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