Sam Fletcher
Senior Writer
HOUSTON, Dec. 21 -- Oil and natural gas futures rose slightly Dec. 20 in the New York market following the explosion of an oil pipeline in Nigeria and amid expectations that the US government would report the first drawdown of crude oil inventories in 3 weeks.
Instead, the US Energy Information Administration reported Dec. 21 that commercial US crude stocks increased by 1.3 million bbl to 322.5 million bbl during the week ended Dec. 16, "well above the upper end of the average range for this time of year," officials said.
US gasoline inventories dipped by 300,000 bbl to 204.1 million bbl during the same period, while distillate fuel stocks fell by 2.8 million bbl, with decreases in both heating oil and diesel fuel. US stocks of both gasoline and distillates now are in the lower half of the average range for this period, EIA said.
Imports of crude into the US fell by 570,000 b/d to nearly 9.9 million b/d during the same week, EIA reported. The input of crude into US refineries declined by 298,000 b/d, with refineries operating at 88% of capacity. As a result, production of both gasoline and distillates fell slightly.
Pipeline damaged
A large oil spill and fire were reported Dec. 20 after gunmen reportedly blew up an oil pipeline operated by Royal Dutch Shell PLC in the Niger Delta in Nigeria. Eight people were killed in that explosion, including some children, officials said.
Shell authorities said they shut in 170,000 b/d of production from two oil fields to reduce the blaze some 50 km west of Port Harcourt.
There were no estimates as to how long it might take workers to extinguish the fire, clean up the spill, and repair the pipeline.
Energy prices
The expiring January contract for benchmark US light, sweet crudes climbed by 64¢ to $57.98/bbl Dec. 20 on the New York Mercantile Exchange, while the February contracted inched up by 4¢ to $58.09/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by 64¢ to $57.99/bbl.
Heating oil for January delivery gained 1.7¢ to $1.72/gal on NYMEX. However, gasoline for the same month lost 1.81¢ to $1.51/gal. The January natural gas contract advanced by 3.7¢ to $14.08/MMbtu on NYMEX, "in light trading because of the New York transit strike," said analysts at Enerfax Daily. They said the natural gas market followed the crude market to higher prices despite forecasts for milder weather.
"The National Weather Service has predicted much of the nation will have warmer-than-normal temperatures from January to March, easing concerns over winter demand," the analysts said. "However, private forecasters predict that temperatures in the Northeast will average warmer than normal in January and March, but colder than normal in February," they added.
In London, the February contract for North Sea Brent crude advanced by 6¢ to $56.17/bbl on the International Petroleum Exchange. Gas oil for January delivery increased by $5.75 to $507/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes lost 25¢ to $51.37/bbl on Dec. 20.
Contact Sam Fletcher at [email protected].
