Senior Staff Writer
HOUSTON, July 21 -- Crude oil futures prices fell to their lowest level this month on the New York Mercantile Exchange July 20 after a US government weekly report showed crude inventories declined less than analysts had expected after two hurricanes.
The August contract for benchmark US light, sweet crudes on the New York Mercantile Exchange declined by 74¢ to $56.72/bbl. The August contract expired at the end of the trading session.
The Energy Information Administration said that commercial crude oil stocks declined by 900,000 bbl to 320.1 million bbl during the week ended July 15.
Crude oil prices fell on the futures market in New York once traders realized that an anticipated deeper draw on crude inventories had failed to materialize.
Crude oil imports rose, averaging 10.825 million b/d, up 871,000 b/d from the week ending July 8, the EIA said.
Meanwhile, crude oil input into US refineries declined by 500,000 b/d to 15.6 million b/d with refineries operating at 92.8% of capacity. Gasoline production dropped substantially, averaging 8.5 million b/d, while distillate fuel production declined slightly, said EIA officials.
US gasoline inventories declined by 1.3 million bbl to 211.3 million bbl. Distillate fuel inventories rose by 2.3 million bblmost of the increase was in heating oilto 122.7 million bbl.
Many analysts and traders had anticipated that two hurricanes in Gulf of Mexico during July would have created more problems for US oil production and refinery operations.
Hurricane Emily made landfall in northeastern Mexico July 20 about 75 miles south of the US border. Petroleos Mexicanos suspended oil production of 2.95 million b/d, the Associated Press reported.
Emily's path was more than 100 miles north of the Bay of Campeche production. Some 15,000 workers who had been evacuated from that area were expected to return to work by July 22, Pemex reported.
The EIA report showed that Hurricane Dennis, which hit the Gulf Coast earlier in July, resulted in less of a draw on US inventory levels than many analysts had feared. Dennis interrupted oil and gas production in the US portion of the gulf.
The September contract for light, sweet crudes on NYMEX dropped 67¢ to $58.02/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., fell 74¢ to $56.73/bbl.
Heating oil for August declined by 3.24¢ to $1.5977/gal on NYMEX. Gasoline for August gained 0.25¢ to $1.6760/gal.
The August natural gas contract dropped slightly, declining 0.036¢ to $7.550/MMbtu on NYMEX. "The market gave back early gains as traders reacted to the EIA weekly petroleum inventory data," sand analysts at Enerfax Daily.
In London, the North Sea Brent crude oil contract dropped by 71¢ to $56.65/bbl on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes climbed by 25¢ to $52.15/bbl on July 20.
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