Senior Staff Writer
HOUSTON, Sept. 12 -- Crude oil futures settlement prices set a record on the New York Mercantile Exchange Sept. 11 despite a decision by members of the Organization of Petroleum Exporting Countries to increase their oil production quotas by 500,000 b/d.
US traders also awaited a weekly government inventory report that was expected to show declining oil inventories.
The October contract for benchmark US light, sweet crudes settled at a record $78.23/bbl, up 74¢ for the Sept. 11 trading session. It was the highest settlement for a front-month contract, breaking the $78.21/bbl previous price record set Aug. 1.
OPEC's production increase is scheduled to become effective Nov. 1. The decision excludes production by Angola and Iraq and affects only the other 10 members (OGJ Online, Sept. 11, 2007).
Traders said the weather also drove energy prices driven higher on Sept. 11. Forecasters indicated that a tropical depression was likely to form in the Atlantic.
A tropical storm warning was issued Sept. 12 for parts of Texas and Louisiana as a tropical depression intensified in the Gulf of Mexico. At 11 a.m. EDT, the ninth tropical depression of the Atlantic hurricane season had maximum sustained winds of 35 mph and its center was 85 miles south-southwest of Galveston, Tex., the National Hurricane Center said.
Senior hurricane forecasters expected 5-10 in. of rain along the middle and upper Texas coast and in southwestern Louisiana, with some areas possibly getting 15 in. of rain.
The Energy Information Administration report for the week ended Sept. 7 showed commercial stockpiles of benchmark US crude fell 7.1 million bbl to 322.6 million bbl. US crude oil inventories remain above the upper average range for this time of year.
Gasoline stocks dropped 700,000 bbl to 190.4 million bbl in the same week, well below average for this time of year. Declines were seen in finished gasoline while gasoline blending components rose.
Distillate fuel inventories increased by 1.8 million bbl to 134 million bbl. Propane and propylene inventories increased by 2.2 million bbl to 57.4 million bbl.
Imports of crude into the US decreased by 647,000 b/d to 9.6 million b/d. The input of crude into US refineries dropped, down 337,000 b/d to 15.6 million b/d. Refining capacity operated at 90.5% last week compared with 92.1% the previous week.
Gasoline production fell, averaging 8.9 million b/d compared with 9.2 million b/d the previous week. Distillate fuel production also fell, averaging 4.1 million b/d compared with 4.3 million b/d the previous week.
The November contract for US light, sweet crudes increased 74¢ for the trading session to $77/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 65¢ to $78.34/bbl.
The October contract for reformulated blendstock for oxygenate blending (RBOB) edged up 0.23¢ to $1.981/gal on NYMEX. Heating oil for the same month increased 1.11¢ to $2.1827/gal.
The October natural gas contract rose 4.3¢ to $5.934/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., advanced by 36¢ to $5.97/MMbtu.
In London, the October IPE contract for North Sea Brent crude increased 90¢ to $76.38/bbl.
The average price for OPEC's basket of 11 benchmark crudes increased by 80¢ to $73.13/bbl on Sept. 11.
Contact Paula Dittrick at email@example.com.