Crude Oil Prices Sink Amid Opec Meeting Expectations and Weather Forecasts

Strategic Insights -

Market speculation over an expected output increase by Opec dominated the petroleum complex, leading to crude oil prices sinking in New York. The July light, sweet crude oil contract on the New York Mercantile Exchange settled at $31.69/barrel, down 64[cent] from the previous day. The August contract also fell, settling at $29.64/bbl, down 38[cent]. Weather forecasts, particularly cooler temperatures in the Northeast and Midwest, contributed to a decline in natural gas futures, with the July Nymex Henry Hub futures contract plummeting 42.5[cent] to $4.063/million Btu.

Key Takeaways:

  • Crude oil prices on the New York Mercantile Exchange (Nymex) sank Monday, with the July light, sweet crude oil contract settling at $31.69/barrel, down 64[cent].
  • The August contract on Nymex settled at $29.64/bbl, down 38[cent].
  • Market speculation over an expected output increase by Opec at its meeting Wednesday, forecasted to be between 500,000-1 million barrels per day, led the market decline.
  • Opec President Ali Rodriguez of Venezuela's comments that enough crude is already in the market were ignored by traders.
  • The deepening of an oil workers' strike in Norway and the shut-in of Royal Dutch/Shell's 200,000 b/d Forcados pipeline after a fire had a minimal impact on market prices.
  • July gasoline lost as much as 3.25[cent] before recovering, settling at $1.0526/gallon, down 1.29[cent].
  • Spot natural gas prices fell to 10[cent] across most of the country due to unexpected cooler weather in the Northeast and Midwest.

Statistics:

  • Crude oil prices on Nymex sank 1.04% (64[cent]) to $31.69/barrel for the July contract.
  • The August contract on Nymex fell 1.29% (38[cent]) to $29.64/bbl.
  • The expected output increase by Opec is forecasted to be between 500,000-1 million barrels per day.
  • July gasoline lost 1.23% (1.29[cent]) from its previous settlement.
  • Spot natural gas prices fell to 10[cent] across most of the country.

Sources:

  • "Crude Oil Prices Sank Monday Amid Opec Meeting Expectations and Weather Forecasts."
  • New York Mercantile Exchange (Nymex) (no date).
  • "Opec to Meet Wednesday Amid Speculation of Output Increase."