Brent crude oil prices gained modestly on the London market Nov. 5 to settle above $73/bbl while light, sweet crude oil prices dropped slightly in New York to settle above $63/bbl. US crude futures have held in the $63/bbl range for three consecutive trading sessions.
“The market is well supplied, and we see a balanced, rather than tight market ahead,” said Morgan Stanley analysts in a research note. Morgan Stanley reduced its fourth-quarter Brent forecast to $77.50/bbl, down from its earlier forecast of $85/bbl.
“With eight countries now receiving waivers from the US from [Iran oil] sanctions, Iran’s export decline also appears more gradual than expected before,” Morgan Stanley analysts said.
The US this week fully implemented oil sanctions on Iran, but granted temporary waivers to China, India, Italy, Greece, Japan, South Korea, Taiwan, and Turkey to purchase Iranian oil for 180 days.
Commerzbank analysts on Nov. 6 noted those eight countries are the biggest buyers of Iranian oil exports. “This is bad news for oil prices,” Commerzbank analysts said. “It means the supply situation on the oil market is set to ease further.”
US President Donald Trump in May announced a US exit from a 2015 international agreement that had resulted in the lifting of sanctions by an alliance of nations against Iran. Sanctions were lifted in exchange for Iran’s cooperation regarding its nuclear program. Earlier this year, the Trump administration also implemented other economic sanctions against Iran.
Energy prices
The December light, sweet crude contract on the New York Mercantile Exchange dropped 4¢ on Nov. 5 to $63.10/bbl. The January contract fell 7¢ to settle at $63.21/bbl.
The NYMEX natural gas price for December was up nearly 3¢ to a rounded $3.57/MMbtu.
Ultralow-sulfur diesel for December gained 2¢ to a rounded $2.19/gal. The NYMEX reformulated gasoline blendstock for December fell 1.6¢ to a rounded $1.69/gal.
Brent crude oil for January was up 34¢ to $73.17/bbl on London’s International Commodity Exchange. The February contract added 27¢ to $73.10/bbl. The gas oil contract for November gained $3.75 on Nov. 5 to close at $682/tonne.
The Organization of Petroleum Exporting Countries’ basket of crudes average for Nov. 5 was $71.45/bbl, up 9¢.
Contact Paula Dittrick at [email protected].
