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Petroleum industry

Oil Prices Experience Wild Swings Amid OPEC Talks and Record-Low Temperatures

Strategic Insights

— 2 min read

Crude oil prices took a rollercoaster ride on Thursday as the market weighed a potential production cut by the Organization of Petroleum Exporting Countries (OPEC). Despite a late-day rally, West Texas Intermediate (WTI) crude oil futures for March delivery closed down 0.04 cents per barrel to $14.56 per barrel on the New York Mercantile Exchange (Nymex), while March North Sea Brent prices closed 12 cents higher to $13.59 per barrel on London's International Petroleum Exchange. The sharp price swings were fueled by OPEC's proposal to cut its production ceiling, which was met with skepticism by traders. Meanwhile, record-low temperatures on the U.S. East Coast contributed to disruptions in oil shipping and storage, leading to price increases in heating oil and natural gas.

Key Takeaways:

  • West Texas Intermediate (WTI) crude oil futures for March delivery closed down 0.04 cents per barrel to $14.56 per barrel on the New York Mercantile Exchange (Nymex).
  • March North Sea Brent prices closed 12 cents higher to $13.59 per barrel on London's International Petroleum Exchange, but still flirted with its five-year low of $13.20 per barrel.
  • OPEC's proposal to cut its production ceiling of 24.52 million barrels per day between 5% and 10% in the second quarter was met with skepticism by traders.
  • Nigeria's oil minister, Don Etiebet, is scheduled to visit Saudi Arabia on Saturday in an attempt to get the Kingdom to go along with the cut.
  • Non-OPEC member Norway said it would not limit output despite OPEC pleas to do so.
  • Russia's energy minister, Anatoly Fomin, promised to try to cooperate with OPEC, but did not promise production cuts, predicting Russian oil exports could rise to 584 million barrels in 2023 (from 569 million barrels in 1993).
  • Extremely low temperatures on the U.S. East Coast hampered shipping in New York Harbor and on the northern part of the Hudson River, contributing to disruptions in oil storage.
  • March No. 2 heating oil rose 0.91 cents per gallon to close at 50.31 cents per gallon, while March unleaded gasoline futures fell 0.29 cents per gallon to 43.06 cents per gallon.

Statistics:

  • West Texas Intermediate (WTI) crude oil futures closed down 0.04 cents per barrel to $14.56 per barrel.
  • March North Sea Brent prices closed 12 cents higher to $13.59 per barrel.
  • OPEC's proposed production cut would be between 5% and 10% of 24.52 million barrels per day.
  • Nigeria's oil minister, Don Etiebet, is scheduled to visit Saudi Arabia on Saturday.
  • Russia's energy minister, Anatoly Fomin, predicted Russian oil exports could rise to 584 million barrels in 2023.
  • March No. 2 heating oil rose 0.91 cents per gallon to close at 50.31 cents per gallon.
  • March unleaded gasoline futures fell 0.29 cents per gallon to 43.06 cents per gallon.
  • Major oil companies lowered wholesale prices across the board on Thursday.

Sources:

  • WASHINGTON -- Crude futures took a rollercoaster ride Thursday as the market considered, then dismissed, talk of possible production cuts by Organization of Petroleum Exporting Countries (OPEC).
  • Major oil companies lowered wholesale prices across the board on Thursday. Unleaded regular gasoline was cut 0.37* to 50.60*/gallon, No. 2 heating by 0.56* to 55.55*/gallon and low-sulfur diesel 0.66* to 56.09*/gallon.

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