Crude oil futures prices reached their highest level since February 2012 on the New York market Aug. 28 while Brent futures prices reached a 6-month high amid worries that a potential military strike against Syria could interrupt the flow of world oil supplies.
US Sec. of State John Kerry sharply criticized the Syrian government’s alleged use of chemical weapons against Syrian rebels in a civil war. European leaders also spoke out against the use of chemical weapons earlier this week.
Analysts say such talk might result in foreign intervention in Syria, which lies near major crude oil sea routes and pipelines. The US Energy Information Administration estimates 4.5 million b/d is transported through Egypt via the Suez Canal and the Suez-Mediterranean pipeline.
Meanwhile, some other oil supplies are coming back on the market. The Libyan oil terminal at Marsa al Brega has reopened after protesters had disrupted exports from that port.
Oil inventories climb
Weekend inventory reports showed crude stockpiles rising after having fallen for 7 of the last 8 weeks. The American Petroleum Institute reported Aug. 27 that oil inventories increased 2.5 million bbl for the week ended Aug. 23.
In its weekly oil inventory report released Aug. 28, EIA said US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased by 3 million bbl to 362 million bbl, which is near the upper limit of the average range for this time of year.
Crude import averaged 8.4 million b/d, up by 423,000 b/d. Over the last 4 weeks, crude oil imports averaged over 8 million b/d, some 723,000 b/d below the same 4-week period last year.
Total motor gasoline inventories decreased by 600,000 bbl, remaining in the upper half of the average range. Finished gasoline inventories increased while blending components inventories decreased, EIA said.
Distillate fuel inventories decreased 300,000 bbl, nearing the lower limit of the average range for this time of year. Propane-propylene inventories increased by 200,000 bbl last week and are in the middle of the average range.
US crude refinery inputs averaged about 15.8 million b/d during the week ended Aug. 23, which was 71,000 b/d less than the previous week’s average. Refineries operated at 91.3% of capacity last week. Gasoline production decreased, averaging 9.4 million b/d. Distillate fuel production also decreased, averaging 4.9 million b/d.
The October contract for benchmark US light, sweet crudes on the New York Mercantile Exchange rose $3.09, closing at $109.01/bbl on Aug. 27. The November contract climbed $2.95 to $108.30/bbl.
Heating oil for October delivery increased 8.2¢ to settle at $3.16/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for September rose 8.2¢ to $3.03/gal.
The September natural gas contract was up by 2.1¢ to close at $3.53/MMbtu on NYMEX. On the US spot market, gas prices at Henry Hub, La., declined by 4.3¢, settling at a rounded $3.51/MMbtu.
In London, the October IPE contract for North Sea Brent crude climbed $3.63 to $114.36/bbl. The September contract for gas oil settled at $961.75/tonne, up $21.50 from the previous session.
The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was up 92¢, closing at $109.01/bbl on Aug. 27.
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