MARKET WATCH: Bullish inventory report lifts oil prices

Crude oil futures prices increased 1% in the New York market June 27 following a bullish government report on oil inventories and positive economic indicators in durable goods and housing.

The front-month natural gas contract, however, was up only 0.3% before dropping more than 3% in early trading June 28 after a larger-than-expected inventory increase last week.

The US Department of Commerce reported the US economy expanded at a rate of 1.9%/year in this year’s first quarter and is expected to repeat that performance in the second quarter. Consumer spending slowed, however, up 2.5% compared with the 2.7% growth earlier projected.

The US Department of Labor, meanwhile, reported 386,000 initial requests for unemployment benefits last week, down by 17,000 from the previous week. However, employers added only 73,000 jobs/month in April and May, down sharply from the average of 226,000 new jobs in the first quarter of 2012. A private survey by the Conference Board showed consumer confidence fell in June for the fourth consecutive month. US manufacturing also weakened in May as auto manufacturers reduced production for the first time in 6 months.

Meanwhile, in its final statistics update on Tropical Storm Debby, the US Bureau of Safety and Environmental Enforcement said June 27 offshore crews had returned to all of the rigs and all but 10 production platforms in the Gulf of Mexico that were evacuated during the storm’s approach. They said 3.21% of daily oil production and 3.64% of daily gas production from the gulf remained shut in.

US inventories

The Energy Information Administration reported the injection of 57 bcf of natural gas into US underground storage during the week ended June 22, surpassing the Wall Street consensus for a 53 bcf increase. The latest addition raised working gas in storage above 3.06 tcf, up 653 bcf from year-ago level and 613 bcf above the 5-year average.

EIA earlier said commercial US crude inventories declined 100,000 bbl to 387.2 million bbl in the same week far short of the Wall Street consensus for a 1.3 million bbl draw. US crude stocks are still above average for this time of year, however. Gasoline inventories increased 2.1 million bbl to 204.8 million bbl last week, exceeding analysts’ expectations of a 1 million bbl advance. Both finished gasoline and blending components were up for the week. Distillate fuel stocks fell 2.3 million bbl to 118.9 million bbl, below average for this period and opposite market anticipation of a 1.2 million bbl gain (OGJ Online, June 27, 2012).

In Houston, analysts with Raymond James & Associates Inc. said, “Yesterday's petroleum inventories update was bullish relative to consensus driven by a sizable draw in distillate inventories as compared to consensus expectations for a build. Gasoline inventories posted a notable build despite a 1.8% increase in demand week-over-week. Overall petroleum product demand was up 2.5%. It is worth noting that refinery utilization increased to 92.6% from 91.9% the previous week. Cushing, Okla., inventories decreased (down 300,000 bbl) for the second time in 3 weeks following the Seaway pipeline reversal. In aggregate, total days of supply decreased 1.2 days and are 1.3 days below year-ago levels.”

Energy prices

The August contract for benchmark US sweet, light crudes climbed 85¢ to $80.21/bbl June 27 on the New York Mercantile Exchange. The July contract gained 84¢ to $80.61/bbl. On the US spot market, West Texas Intermediate at Cushing was up 85¢ to $80.21/bbl.

Heating oil for July delivery increased 1.72¢ to $2.59/gal on NYMEX. Reformulated stock for oxygenate blending for the same month, however, fell 2.47¢ to $2.62/gal.

The July natural gas contract inched up 0.7¢ to $2.77/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., escalated by 18.1¢ to $2.88/MMbtu.

In London, the August IPE contract for North Sea Brent increased 48¢ to $93.50/bbl. Gas oil for July was up $10.25 to $829/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes advanced 78¢ to $90.91/bbl.

Contact Sam Fletcher at

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts

Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected