HOUSTON, Oct. 25 -- Energy prices rose Oct. 24, led by natural gas and fuel oil, as US forecasts of cold weather triggered speculation of reduced heating oil inventories in the wake of the proposed reduction of crude production by members of the Organization of Petroleum Exporting Countries.
It marked the first price increase for crude futures since OPEC ministers said Oct. 20 they would cut production by 1.2 million b/d to 26.3 million b/d effective Nov. 1 in an effort to halt the fall of oil prices from a peak above $78/bbl in mid-July. The front-month crude futures contract continues to trade below $60/bbl in the New York market, however, amid doubts that OPEC's plan to cut supplies actually will be implemented, said analysts in the Houston office of Raymond James & Associates Inc.
US inventories fall
The US Energy Information Administration said Oct. 25 a sharp fall in crude imports dropped commercial US crude inventories by 3.3 million bbl to 332.3 million bbl during the week ended Oct. 20. Imports of crude into the US plummeted by 936,000 b/d to 9.5 million b/d during that period.
US gasoline stocks fell by 2.8 million bbl to 207.4 million bbl during the same week. Distillate fuel inventories declined by 1.4 million bbl to 144 million bbl, with a drop in ultralow-sulfur diesel fuel overcoming a 700,000 bbl increase in heating oil. "Total commercial petroleum inventories declined by 11.3 million bbl last week, the largest drop since the week ending Sept. 2, 2005, but remain well above the upper end of the average range for this time of year," EIA reported.
Input of crude into US refineries increased by 58,000 b/d to 14.9 million b/d during the latest period, with units operating at 86.2% of capacity. Gasoline production fell to 8.7 million b/d while distillate fuel production rose to 4.1 million b/d.
The December contract for benchmark US light, sweet crudes regained 54¢ to $59.35/bbl Oct. 24 on the New York Mercantile Exchange. The January position increased 59¢ to $61.07/bbl. On the US spot market, West Texas Intermediate was down 11¢ to $56.91/bbl. Unleaded gasoline for November delivery jumped by 6.65¢ to $1.54/gal on NYMEX. Heating oil for the same month increased 2.62¢ to $1.70/gal.
The November natural gas contract regained 21¢ to $7.09/MMbtu on NYMEX.
In London, the December IPE contract for North Sea Brent advanced 65¢ to $59.86/bbl. The November gas oil contract climbed by $10.25 to $536.50/tonne.
The average price for OPEC's basket of 11 benchmark crudes was up 37¢ to $53.89/bbl on Oct. 24. So far this year, OPEC's basket price has averaged $62.12/bbl.
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