Brent crude oil prices approach $85/bbl on supply concerns
Light, sweet crude oil prices for November and December jumped more than $2 to settle above $75/bbl on the New York market Oct. 1 while Brent crude oil for December and January also climbed more than $2 to settle above $84/bbl.
Analysts attributed the oil price jump to concerns about lower levels of world oil supply, noting Iranian exports are falling. US oil sanctions against Iran take full effect in early November.
“Concerns about tight supply are driving oil prices significantly further up,” Commerzbank analysts wrote in a research note. “News that China is now also reducing its oil purchases from Iran presumably gave the final push. This is likely to see Iranian oil exports fall by 1.5 to 2 million b/d.”
In September, the Organization of Petroleum Exporting Countries and some non-OPEC producers said that they had no plans to accelerate production beyond what was previously planned. The announcement sent oil prices higher.
OPEC and some non-OPEC producers, led by Russia, said they would adhere 100% with current production targets implemented in January 2017. Producers had overcomplied with the target levels in the past to help reduce oil prices. Now, OPEC and others plan a gradual increase in production.
The light, sweet crude contract for November delivery on the New York Mercantile Exchange gained $2.05 to $75.30/bbl on Oct. 1. The December contract rose $2.08 to settle at $75.14/bbl.
The NYMEX natural gas price for November was up 8¢ to a rounded $3.09/MMbtu. The Henry Hub cash gas was not immediately available.
Ultralow-sulfur diesel for November rose nearly 6¢ to $2.41/gal. The NYMEX reformulated gasoline blendstock for November increased 4¢ to settle at $2.13/gal.
Brent crude oil for December jumped $2.25 to $84.98/bbl on London’s International Commodity Exchange. The January contract climbed $2.27 to $84.51/bbl. The gas oil contract for October gained $9.25 to settle at $734/tonne on Oct. 1.
OPEC’s basket of crudes for Oct. 1 averaged $81.49/bbl, up 1¢.
HOUSTON, Oct. 2
By Paula Dittrick