MARKET WATCH: NYMEX gasoline, diesel futures prices climb on anticipated demand

Oil futures prices rose moderately Dec. 26 in trading on the New York market while gasoline and diesel prices reached levels not seen since September. Analysts said they expected the Dec. 27 release of a weekly government petroleum status report would show strong demand for petroleum products.

The US Energy Information Administration issued its weekly petroleum status report for the week ended Dec. 20, confirming an anticipated decrease in crude oil inventories. The report was released Dec. 27, which was 2 days later than normal because of the Christmas holiday.

Separately, the American Petroleum Institute earlier this week reported a surprise rise of 716,000 bbl in crude inventories for the week ended Dec. 20. API’s numbers showed the gasoline inventory was down 2.486 million bbl.

Regarding natural gas in underground storage, EIA estimated 3.07 tcf as of Dec. 20, which was a net decline of 177 bcf from the previous week. Stocks were 591 bcf less than last year at this time and 313 bcf below the 5-year average of 3.38 tcf.

The latest withdrawal statistics were more typical than the previous week’s report. For the week ended Dec. 13, EIA’s gas storage report estimated a 285 bcf decline, breaking a weekly record withdrawal set during January 2008 (OGJ Online, Dec. 19, 2013).

A series of positive economic indicators has brightened the outlook for US energy demand, particularly consumer spending on fuel, analysts say. That latest indicator came Dec. 26 when the US Department of Labor said initial jobless claims fell more than expected.

US oil stocks drop

EIA reported US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 4.7 million bbl for the week ended Dec. 20 compared with the week ended Dec. 13.

At 367.6 million bbl, crude oil inventories are near the upper limit of the average range for this time of year, EIA said. Total motor gasoline inventories decreased by 600,000 bbl last week, and are in the upper half of the average range.

Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 1.9 million bbl last week and are below the lower limit of the average range for this time of year. Propane-propylene inventories fell 2.5 million bbl last week and are well below the lower limit of the average range, EIA said.

US refinery inputs averaged over 16.2 million b/d of crude oil during the week ended Dec. 20, marking inputs that were 302,000 b/d higher than the previous week’s average. Refineries operated at 92.7% of capacity last week. Gasoline production increased, averaging 9.7 million b/d, and distillate fuel production increased, averaging 5.1 million b/d.

US crude oil imports averaged over 7.5 million b/d, down by 197,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.5 million b/d, which EIA said was 9.7% below the same period last year. Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 486,000 b/d. Distillate fuel imports averaged 175,000 b/d last week.

Energy prices

The New York Mercantile Exchange February crude contract climbed 33¢ on Dec. 26 to close at $99.55/bbl. The March contract rose 28¢ to settle at $99.62/bbl.

Heating oil for January delivery climbed a rounded 1.7¢, settling at a rounded $3.09/gal. Reformulated gasoline stock for oxygenate blending for January delivery was up 0.6¢ to a rounded $2.82/gal, which was the highest front-month RBOB settlement since Sept. 6. The January RBOB contract expires Dec. 31.

January diesel prices rose 1.65¢ to close Dec. 26 at $3.09/gal, which was the highest since Sept. 13.

The January natural gas contract on NYMEX climbed 1.7¢ to settle at a rounded $4.43/MMbtu. On the US spot market, the gas price at Henry Hub, La., dropped 3.7¢ to a rounded $4.40/MMbtu.

In London, the February ICE contract for Brent crude oil climbed 8¢, closing Dec. 26 at $111.98/bbl. The ICE gas oil contract for January was up $5.75 to settle at $950/tonne.

The price of the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was unavailable because the OPEC Secretariat office was closed.

Contact Paula Dittrick at paulad@ogjonline.com.

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