MARKET WATCH: Crude flat; gas down in sluggish markets

Crude contracts for the next several months were essentially flat in a mixed New York futures market Apr. 23 while natural gas pulled back 0.7%.

“The Brent-West Texas Intermediate spread closed at $11.13/bbl—not too far from the $11.01/bbl closing low recorded last week,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group.

Meanwhile, the broader equity market suffered “the damaging consequences of inaccurate news reporting” when a “false tweet" caused a brief but rapid selloff “that took the market into negative territory,” said analysts in the Houston office of Raymond James & Associates Inc. “In the end, however, all was well, and the Standard & Poor’s 500 Index closed up 1%.” The Oil Service Index and the SIG Oil Exploration & Production Index followed the broader market higher, up 1% and 0.5%, respectively.

“While investors continued to look for signals from the latest batch of earnings reports, the market found support in optimistic new home sales data,” Raymond James analysts reported.  

However, the  Commerce Department reported Apr. 24 orders for durable goods fell 5.7% in March, the biggest drop in 7 months and down from a 4.3% gain in February. Analysts blamed government spending cuts and weaker foreign markets for making US businesses more cautious.

US inventories

The Energy Information Administration said Apr. 24 commercial US crude inventories increased 900,000 bbl to 388.6 million bbl in the week ended Apr. 19, below Wall Street’s consensus for a 2 million bbl gain. Gasoline stocks fell 3.9 million bbl to 217.8 million bbl in the same period, far exceeding analyst’s expectations of a 600,000 bbl decline. Both finished gasoline inventories and blending components inventories were down. On the other hand, distillate fuel inventories were up 100,000 bbl to 115.3 million bbl, short of the market’s outlook for a 500,000 bbl addition.

Imports of crude into the US increased 133,000 b/d to 7.6 million b/d last week. In the 4 weeks through Apr. 19, US crude imports averaged 7.7 million b/d, down 1.3 million b/d from year-ago levels. Gasoline imports last week averaged 662,000 b/d, and distillate fuel imports averaged 154,000 b/d.

The input of crude into US refineries dropped 586,000 b/d to 14.5 million b/d last week with units operating at 83.5% of capacity. Gasoline production increased to 9 million b/d while distillate fuel production decreased to 4.3 million b/d.

Energy prices

The new front-month June contract for benchmark US light, sweet crudes lost 1¢ to $89.18/bbl Apr. 23 on the New York Mercantile Exchange. The July contract increased 1¢ to $89.46/bbl. Similar increases of 1¢/bbl were posted for the August-September contracts with the October contract up 3¢/bbl. On the US spot market, WTI at Cushing, Okla., was down 1¢ to $89.18/bbl.

Heating oil for May delivery inched up 0.23¢ but closed essentially unchanged at a rounded $2.81/gal on NYMEX. Reformulated stock for oxygenate blending for the same month dropped 5.04¢ to $2.72/gal.

The May natural gas contract declined 2.9¢ to $4.24/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., lost 4¢ to $4.29/MMbtu.

In London, the June IPE contract for North Sea Brent was down 8¢ to $100.31/bbl. Gas oil for May advanced $2.75 to $839.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes decreased 23¢ to $97.52/bbl.

Contact Sam Fletcher at samf@ogjonline.com

 

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