MARKET WATCH: NYMEX crude oil prices climb on winter weather, storage

Crude oil futures prices on the New York and London markets reached their highest levels so far this year during Feb. 18 trading, driven in part by winter weather and in part by a private inventory assessment showing a larger-than-expected drop in crude supplies at Cushing.

The New York Mercantile Exchange March crude contract rose $2.13 to settle at $102.43/bbl, which was the front-month’s highest price since Oct. 10. The April contract was $102.10/bbl, up $1.97 for the Feb. 18 closing compared with the Feb. 14 settlement.

The NYMEX trading floor was closed Feb. 17 for Presidents’ Day.

In London, the April ICE contract for Brent also rallied, up $1.28 from Feb. 18 to settle at $110.46/bbl.

The May contract was up $1.23 to $110.11/bbl.

Genscape Inc. of Louisville, KY, reported a 2.7-million-bbl decline in Cushing crude oil inventories last week, the Wall Street Journal reported. Genscape uses infrared cameras, aerial diagnostics, and other proprietary measurement technology to measure storage volumes (OGJ Online, Aug. 28, 2013).

The weekly government inventory report from the US Energy Information Administration won't be released until Feb. 20, one day later than normal because of the Monday federal holiday.

EIA’s estimate generally is considered the official inventory number by market participants, but traders and analysts also watch the reports from Genscape, which also measures tank levels in Canada, at Patoka in Illinois, and at four separate locations in West Texas, including Midland.

Separately, Saxo Bank analyst Ole Hansen said energy commodities have rallied given a strong weather-related rise in demand for crude oil and gas in the US along with world oil market “persistent supply disruptions” in Libya, South Sudan, and Nigeria. Hansen is head of Saxo Bank commodity strategy in Denmark.

”Commodities are showing a very strong performance so far this February,” said Hansen. “The energy sector, which had a bit of a shaky start to the new year, has been picking up speed.”

Energy prices

Heating oil for March delivery was up 2.35¢ to a rounded $3.10/gal. Reformulated gasoline stock for oxygenate blending for March delivery increased 2.7¢ to a rounded $2.83/gal, its highest level since Sept. 6.

The March natural gas contract on NYMEX climbed 33.7¢ to a rounded $5.55/MMbtu. On the US spot market, the gas price at Henry Hub rose to a rounded $5.80/MMbtu on Feb. 18, up 27¢ from Feb. 14.

In London, the ICE gas oil contract for March climbed $9 to $933/tonne on Feb. 18.

The Organizational of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $106.53/bbl on Feb. 18, up 42¢.

Contact Paula Dittrick at paulad@ogjonline.com

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