Sign in Subscribe
Petroleum industry

Energy Prices Rise on Reports of OPEC Production Cuts and Aramco Price Increase

Strategic Insights

— 2 min read

Market analysts say that Tuesday's rally on the New York Mercantile Exchange (Merc) was fueled by fresh reports that the Organization of Petroleum Exporting Countries (OPEC) may agree to cut its output by 1 million barrels a day, while Saudi Arabia's state oil company, Aramco, will increase the price of oil sold to its contract customers. These developments have sparked hopes among energy traders that oil prices will stabilize and potentially rise, leading to a surge in energy prices on the Merc and other global markets.

Key Takeaways:

  • Energy prices rose on the New York Mercantile Exchange (Merc) on Tuesday, with crude oil for February delivery adding 11 cents to settle at $14.67 a barrel.
  • The rally was fueled by reports that OPEC may cut its output by 1 million barrels a day and Aramco's decision to increase the price of oil sold to its contract customers.
  • Aramco plans to raise the price of oil sold to its European contract customers by 15 cents a barrel to 25 cents a barrel, and by 60 cents a barrel to 80 cents a barrel for oil sold to contract customers in the US, beginning February 1.
  • Tom Curtis, market analyst at Pegasus Econometric Group in New York, attributed the price increase to Aramco's decision to test the market and the speculation surrounding OPEC's potential production cuts.
  • The reports of OPEC's potential production cuts also led to a surge in energy prices on other global markets, including the US Gulf Coast spot market, the European spot market, and the International Petroleum Exchange in London.

Statistics:

  • Crude oil for February delivery added 11 cents to settle at $14.67 a barrel.
  • The high for the day was $14.72, while the low was $14.35.
  • February gasoline jumped by 0.93 cent to settle at 42.09 cents a gallon.
  • February heating oil advanced by 0.82 cent to settle at 46.03 cents a gallon.
  • Natural gas for February delivery moved up 3.5 cents to settle at $1.964 for 1,000 cubic feet.
  • The US Gulf Coast spot market saw West Texas Intermediate (WTI) rise 10 cents to $14.65 a barrel.
  • The European spot market saw United Arab Emirates' Dubai Light gain 15 cents to $12.55 a barrel.

Sources:

  • "Energy prices rose Tuesday on the New York Mercantile Exchange," (UPI source not specified)
  • Tom Curtis, market analyst at Pegasus Econometric Group in New York (name, title, and organization exactly as mentioned in the source)

Read more