MARKET WATCH: Oil prices fall, hovering above $30/bbl
Light, sweet crude prices tumbled on the New York market Jan. 25 to settle above $30/bbl, giving up much of the gains from two previous trading sessions, and analysts blamed the price decline upon lingering concerns about an oversupplied world oil market.
On Jan. 25, Saudi Aramco Chairman Khalid al-Falih said Saudi Arabia could withstand low prices for “a long, long time.”
Al-Falih discussed Saudi Arabia’s ability to continue as a low-cost producer while he talked with Wall Street Journal reporters on the sidelines of a business conference in Riyadh about Global Competitiveness.
“Our investments in capacity of oil and gas have not slowed down. We have been able to do a lot of cuts in spending by simply driving down costs,” he said during a conference panel discussion.
Separately while attending a Chatham House think-tank conference in London, the Organization of Petroleum Exporting Countries Sec.-Gen. Abdalla el-Badri said non-OPEC producers need to help reduce the global oil oversupply.
“It is vital the market addresses the issue of the stock overhang,” he said. “It should be viewed as something OPEC and non-OPEC tackle together.”
The NYMEX natural gas contract for February gained nearly 2¢ to a rounded $2.16/MMbtu. The Henry Hub gas price declined 6¢ to $2.14/MMbtu on Jan. 25.
Heating oil for February delivery dropped nearly 6¢ to a rounded 93¢/gal. The price for reformulated gasoline stock for oxygenates blending for February was down 5¢ to a rounded $1.03/gal.
The March ICE contract for Brent crude dropped $1.68 to settle at $30.50/bbl on Jan. 25, and the April contract fell $1.53 to $31.31/bbl. The ICE gas oil contract was $277.25/tonne on Jan. 25, down $6.75.
The average price for OPEC’s basket of 12 benchmark crudes for Jan. 25 was $25.58/bbl, up 8¢.