MARKET WATCH: NYMEX oil price falls in advance of higher US crude supply

Oil prices dropped Oct. 29 on the New York market in anticipation of a weekly government inventory report that marked the sixth consecutive week of growing US petroleum and product stockpiles.

Meanwhile, the US Department of Commerce said Oct. 29 that retail sales declined 0.1% in September, which the market took as a disappointing indicator of consumer demand.

The 2-day Federal Open Market Committee was scheduled to end Oct. 30, and market participants awaited a statement regarding the direction of the Federal Reserve’s $85 billion/month bond-buying program.

The US Energy Information Administration reported Oct. 30 that commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 4.1 million bbl for the week ended Oct. 25 compared with the previous week.

At 383.9 million bbl, US crude oil inventories are above the higher average typical for this time of year, EIA said.

Gasoline inventories

Total motor gasoline inventories decreased by 1.7 million bbl and are near the upper half of the average range. Finished gasoline inventories increased while blending components inventories decreased. Distillate fuel inventories decreased by 3.1 million bbl and are near the lower limit of the average range for this time of year. Propane-propylene inventories fell 1.2 million bbl last week and are in the lower half of the average range.

US refinery inputs averaged about 15.1 million b/d during the week ending Oct. 25, which was 197,000 b/d above the previous week’s average. Refineries operated at 87.3% of capacity. Gasoline production increased, averaging 9.4 million b/d.

Distillate fuel production increased, averaging over 4.9 million b/d.

Crude oil imports averaged about 7.5 million b/d, down by 197,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.8 million b/d, 537,000 b/d below the same period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 537,000 b/d. Distillate fuel imports averaged 138,000 b/d.

Energy prices

The New York Mercantile Exchange December crude contract dropped 48¢ on Oct. 29, settling at $98.20/bbl. The January 2014 contract declined 48¢ to $98.38/bbl.

Heating oil for December delivery was down by less than a penny to hold steady at a rounded $2.96/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for November delivery fell 2.1¢ to a rounded $2.61/gal.

The November natural gas contract dropped 7.3¢ to a rounded $3.50/MMbtu on NYMEX. On the US spot market, the gas price at Henry Hub, La., was a rounded $3.57/MMbtu, down 5.8¢.

In London, the December ICE contract for Brent crude oil was down 60¢ to $109.01 while the January 2014 contract was down 51¢ to $108.53/bbl. The November contract for ICE gas oil rose $4.75 to $930.50/tonne.

The Organization of Petroleum Exporting Countries said its basket of 12 benchmark crudes was up 61¢ to $106.36/bbl on Oct. 29.

Contact Paula Dittrick at paulad@ogjonline.com.

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