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Petroleum

Crude Oil Prices Plummet Amid Norway's Increased Output

Strategic Insights

— 1 min read

Crude oil prices took a steep drop on the New York Mercantile Exchange (Nymex) due to forecasts of increased output from Norway, outweighing continued cold weather in the Northeast and technical indicators suggesting a rise in crude prices. The news sent light, sweet crude futures plummeting to $18.59 per barrel, reversing Friday's gains. Analysts at Pegasus Econometric Group attributed the drop to Norway's projected increase in crude output to 2.8 million barrels per day in early 1995 from the current 2.6 million barrels per day.

Key Takeaways:

  • Light, sweet crude futures on the Nymex dropped 19 cents to $18.59 per barrel on Monday, reversing Friday's gains.
  • Norway's crude output is expected to increase to 2.8 million barrels per day in early 1995 from the current 2.6 million barrels per day.
  • Analysts at Pegasus Econometric Group attributed the drop in crude prices to Norway's increased output.
  • Refco Inc. analyst Marcie J. Forsyth described the drop as a "technical sell-off," with traders liquidating positions after crude prices faced resistance at $19 per barrel.
  • March gasoline futures prices settled at 57.3 cents per gallon, down 0.05 cents from Friday's settlement.
  • New York State is considering joining New Jersey in shortening its oxygenated fuels season, though no decision has been made.
  • Connecticut is expected to announce a decision on its winter oxyfuels program in the next few days.

Statistics:

  • Light, sweet crude futures on the Nymex dropped 19 cents to $18.59 per barrel on Monday.
  • Norway's crude output is expected to increase to 2.8 million barrels per day in early 1995.
  • March gasoline futures prices settled at 57.3 cents per gallon, down 0.05 cents from Friday's settlement.
  • The March heating oil contract settled at 49.2 cents per gallon, down 0.24 cents from Friday's settlement.
  • The weather has temporarily bolstered the natural gas futures contract, which jumped 5.6 cents per million British thermal units to settle at $1.538 per million British thermal units.

Sources:

  • "Nymex announces support for current physical specifications for March and April gasoline contracts" (no date)
  • Forbes, Marcie J. (Analyst, Refco Inc.) (no date)
  • Pegasus Econometric Group (no date)
  • Gregory A. Dolan, spokesman, New York Department of Environmental Conservation (no date)
  • Unnamed source, Connecticut (no date)

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