Crude Oil Prices Drop Amid Skepticism Over Venezuelan Strike

Strategic Insights -

Crude oil prices lost steam on Thursday as traders took profits, awaiting concrete indications of a potential oil workers' strike in Venezuela. July light, sweet crude had set a new high for the week at $18.17 per barrel on the New York Mercantile Exchange (Nymex), but settled 14 cents lower at $17.85 per barrel. Analysts remain cautious, noting previous threats of a strike have gone unfulfilled, and the market has largely been driven by minor or moderately important news.

Key Takeaways:

  • Crude oil prices fell 14 cents to $17.85 per barrel on the New York Mercantile Exchange (Nymex) amid skepticism over a potential oil workers' strike in Venezuela.
  • Analyst Chris Schachte believes crude is looking for a new range, with the high end likely to be at or below $18 per barrel.
  • Previous threats of a strike have gone unfulfilled, and the market has been driven largely by minor or moderately important news.
  • Downside potential may come from the imminent release of the International Energy Agency's data on OPEC output compliance for May, which has already been priced into the market.
  • North Sea Brent crude fell 11 cents to $16.07 per barrel, tracking Nymex throughout the session.
  • Gasoline prices lost 0.71 cents to close at 51.53 cents per gallon due to a refinery issue at Mobil Corp.'s Joliet, Ill., refinery.
  • July heating oil proved stronger, slipping only 0.19 cents to 42.74 cents per gallon, due to a surprise draw in stocks reported earlier in the week.

Statistics:

  • Crude oil prices fell 14 cents to $17.85 per barrel on the Nymex.
  • North Sea Brent crude fell 11 cents to $16.07 per barrel.
  • Gasoline prices lost 0.71 cents to close at 51.53 cents per gallon.
  • July heating oil slipped 0.19 cents to 42.74 cents per gallon.
  • Propane stocks grew by more than 4 million barrels in May, according to the Energy Information Administration (EIA).
  • Liquefied petroleum gas spot prices rose on the week, helped by the increase in crude oil prices.
  • The July Nymex Henry Hub contract fell 10.5 cents to $2.355 per million British thermal units (MMBtu).

Sources:

  • "Crude Oil Prices Drop 14 cents on Skepticism About Venezuelan Strike" [Associated Press], June 16 (no date mentioned)
  • GSC Energy in Atlanta (no date mentioned)
  • Chris Schachte, analyst with GSC Energy in Atlanta (no date mentioned)
  • International Energy Agency (no date mentioned)
  • Energy Information Administration (EIA) (no date mentioned)