MARKET WATCH: Oil prices climb while US elects president

Oil prices rallied on Nov. 6 while US voters went to the polls to elect a president, and US gasoline futures climbed following an announcement from Phillips 66 that its 238,000-b/d Bayway refinery in Linden, NJ, will take 2-3 weeks to resume operations.

President Barack Obama was reelected, defeating Republican challenger Mitt Romney in a contentious race.

Phillips 66 said Nov. 5 that work is under way to repair or replace Bayway refinery electrical equipment damaged by saltwater during the storm surge from Hurricane Sandy.

“The refinery’s processing units are in good condition. The Bayway polypropylene plant will follow the same restart schedule as the refinery,” Phillips 66 said.

After water from the storm surge receded, Phillips 66 discovered oil had spilled at the refinery. The company notified regulatory agencies and is working to clean up the spill, estimated at 185 bbl.

“Phillips 66 will continue working with the US Coast Guard and the New Jersey Department of Environmental Protection to complete the clean up,” the company said.

US inventories

Meanwhile, the Energy Information Administration said Nov. 7 that commercial US crude oil inventories increased by 1.8 million bbl for the week ending Nov. 2 compared with the previous week.

At 374.8 million bbl, crude oil inventories are above the upper limit of the average range for this time of year. Gasoline stocks for the same week increased by 2.9 million bbl and are in the middle of the average range. Both finished gasoline inventories and blending components inventories increased.

Distillate fuel inventories increased by 100,000 bbl to 118.1 million bbl, EIA said.

Imports of oil into the US averaged 8 million b/d, up by 89,000 b/d from the previous week. Over the last 4 weeks, oil imports have averaged 8.3 million b/d, down 441,000 b/d from the same period last year.

Crude input into US refineries averaged 14.7 million b/d for the week ended Nov. 2, which was 183,000 b/d below the previous week’s average. Refineries operated at 85.4% of capacity for the week ended Nov. 2, EIA said.

Gasoline production decreased for the week ended Nov. 2, averaging 8.9 million b/d while distillate fuel production was up, averaging 4.6 million b/d.

Energy prices

The December contract for benchmark US light, sweet crudes gained $3.06 to $88.71/bbl Nov. 6 on the New York Mercantile Exchange. The January contract climbed $3.03 to $88.17/bbl. On the US spot market, West Texas Intermediate at Cushing was up $3.03 to $88.71/bbl.

The front-month December contract for heating oil rose 7¢ to $3.05/gal on NYMEX. Reformulated stock for oxygenate blending for the same month rose 7.8¢ to $2.69/gal.

The December natural gas contract rose 6.3¢ to $3.627/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., increased 4.5¢ to $3.378/MMbtu.

In London, the December IPE contract for North Sea Brent climbed $3.34 to $111.07/bbl. Gas oil for November climbed $14.50 to $937/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes rose $2.37 to $105.79/bbl.

Contact Paula Dittrick at paulad@ogjonline.com.

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