Crude oil futures prices on the New York market settled Jan. 15 more than $1.50/bbl higher than the previous day after a weekly government report showed a larger-than-expected draw in US crude oil supplies.
The US Energy Information Administration reported oil inventories dropped 7.7 million bbl to 350.2 million bbl, which surprised analysts. A Wall Street Journal poll earlier in the week showed analysts expected a drop of 800,000 bbl.
The report for the week ended Jan. 10 marked the biggest one-week drop since the week ended Dec. 6, 2013.
The EIA’s weekly US underground gas storage report on Jan. 16 showed a significant withdrawal in gas supplies, but it was not as severe as some analysts had expected after a recent cold snap across much of the Midwest and some of the East Coast.
Working gas in storage was estimated at 2.53 tcf as of Jan. 10, which was a net decline of 287 bcf from the previous week. Stocks were 659 bcf lower than last year at this time and 443 bcf below the 5-year average of 2.97 tcf.
On international oil markets, Brent crude oil prices improved modestly upon a wire service news story out of China as well as a monthly supply report from the Organization of Petroleum Exporting Countries.
Analysts noted a Reuters news report that said China National Petroleum Corp.’s research institute believes China’s oil demand will increase 4% to 10.36 million b/d during 2014.
The estimate was larger than an earlier, separate report from the International Energy Agency, which forecast Chinese oil demand would increase 3.7% in 2014.
OPEC also estimated 2013 demand for OPEC crude at 29.9 million b/d, representing a decrease of 500,000 b/d from 2012. In 2014, demand for OPEC crude is forecast at 29.6 million b/d, a drop of 400,000 b/d from 2013, the report said.
Heating oil for February delivery climbed 4.3¢ to a rounded $2.98/gal. Reformulated gasoline stock for oxygenate blending for February delivery edged up a fraction of a penny to rounded $2.63/gal.
The February natural gas contract on NYMEX dropped 4.4¢ to settle at a rounded $4.33/MMbtu. On the US spot market, the Jan. 15 gas price at Henry Hub climbed 7.9¢ to a rounded 4.43/MMbtu.
In London, the February ICE contract for Brent crude oil was up 74¢, closing at $107.13/bbl. The March Brent contract gained 67¢ to settle at $106.27/bbl. The ICE gas oil contract for February climbed $13.50 to $913.75/tonne.
The Organizational of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $104.35/bbl on Jan. 15, up 36¢.
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