West Texas Intermediate (WTI) and Brent crude oil prices finished lower on the final day of 2019. The February WTI contract price lost 62 cents Tuesday, settling at $61.06 per barrel. It traded within a range from $60.63 to $61.88. Brent crude for March delivery ended the day 67 cents lower at an even $66 per barrel.
Oil markets had traded flat Monday, with WTI closing at $61.68 per barrel as traders contemplated potential supply risks following U.S. airstrikes on Iranian-backed militia in Iraq Sunday, noted Vance Scott, Houston-based managing director in the energy practice of global, multi-industry consulting firm AlixPartners LLP. Scott pointed out that Monday’s settlement was down less than 0.2 percent from the Christmas holiday-week close. He added that Brent was down marginally as well for the same period, losing 0.4 percent to close at $66.62.
“Oil market participants are working to understand if the first major use of U.S. air power in Iraq under the Trump administration – and the first since American forces were reinstated there in 2014 – substantially changes Middle East supply risk,” explained Scott. “The relatively flat oil-price response so far might be an indication that U.S.-Iran tensions are already factored into pricing assumptions.”
Scott also suggested that two recent positive supply developments from Guyana may have offset concerns about the situation in the Middle East: pre-Christmas first oil from the Liza field and Shell’s securing the rights to lift and market the first cargoes.