Crude Oil Rebound Fizzles
West Texas Intermediate (WTI) and Brent crude oil rebounded toward the end of last week but failed to sustain positive momentum throughout Monday’s session.
The July WTI lost 73 cents Monday, settling at $53.26 per barrel. The contract peaked at $54.84 and bottomed out at $53.05.
Brent crude oil for August delivery posted a steeper decline during the early week session. The benchmark ended the day at $62.29, reflecting a $1 loss.
As Bloomberg reported earlier Monday, oil futures had been on the rise. Factors such as slower U.S. drilling activity and reports that Saudi Arabia and Russia had pledged to continue trying to stabilize the oil market through the OPEC+ alliance contributed to the uptick, the news service stated. Moreover, another Bloomberg article posted to Rigzone indicates that oil market expectations for 2020 appear to be increasingly bearish.
Tracking crude oil, reformulated gasoline (RBOB) also edged downward Monday. The July RBOB contract price shed nearly one cent to settle at $1.73 per gallon.
Although the recent slump in crude oil prices has garnered much attention, natural gas prices have also dropped considerably in recent weeks. Tom McNulty, Houston-based managing director of Great American Group, anticipates developments in the gas market as a result.
“When you have a lot of something, you need to find a way to commercialize it – fast,” said McNulty. “The U.S. is awash in natural gas, and this is great for commercial reasons and for energy security reasons.”
Noting that the most recent U.S. Department of Energy gas inventory data show a week-on-week increase of 119 billion cubic feet, McNulty also observed that NYMEX Henry Hub prices are at three-year lows and are down approximately 20 percent year-to-date.
Bucking the recent trend, however, July natural gas futures added two cents Monday to settle at $2.36.
“Natural gas will drive power generation, LNG exports and the petchem complex for years to come,” said McNulty. “We shall see about transportation. That might happen to some degree as well.”
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Senior Editor | Rigzone