MARKET WATCH: Crude oil prices fall as talks start on Ukraine

Prices for light, sweet crude oil fell modestly on the New York market Apr. 15 while gasoline futures reached their highest level since Aug. 29, 2013, pending the release of a weekly US government report on oil and product inventories.

Gasoline inventories have dropped for 8 consecutive weeks, the US Energy Information Administration reported.

US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 10 million bbl as of Apr. 11 from Apr. 4, EIA said. With an Apr. 11 estimated total of 394.1 million bbl, crude oil inventories are above the average range for this time of year.

Meanwhile, Brent crude oil prices fell during Apr. 15 trading on the London market, and analysts attributed the drop to easing worries about possible supply disruptions because US, European, Russia, and Ukraine representatives were scheduled to meet in Geneva starting Apr. 16.

The Ukraine military fired shots in the government’s effort against pro-Russian rebels in eastern Ukraine on Apr. 15 to keep an armed mob from entering a military air base, but the military reportedly had not engaged with the rebels or entered any occupied government buildings.

Russian Foreign Minister Sergei Lavrov said any use of force by Ukraine against protesters could derail diplomatic talks.

US gasoline supply drops

Total motor gasoline inventories decreased 200,000 bbl for the week ended Apr. 11, which EIA said was near the lower limit of the average range. Finished gasoline inventories decreased while blending components inventories increased.

Distillate fuel inventories decreased 1.3 million bbl, which is below the lower limit of the average range for this time of year. Propane-propylene inventories rose 800,000 bbl, which is near the lower limit of the average range, EIA said.

US refinery inputs averaged over 15.6 million b/d day during the week ended Apr. 11, which was 276,000 b/d more than the previous week’s average. Refineries operated at 88.8% of capacity last week. Gasoline production decreased, averaging over 8.9 million b/d for the week ended Apr. 11. Distillate fuel production increased, averaging 4.9 million b/d.

US crude oil imports averaged 8.3 million b/d, up 959,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.5 million b/d. Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 532,000 b/d. Distillate fuel imports averaged 258,000 b/d.

Energy prices

The New York Mercantile Exchange May crude oil contract price was down 30¢ on Apr. 15, closing at $103.75/bbl. The June contract declined 21¢ to $103/bbl.

Heating oil for May delivery edged up 0.79¢ to a rounded $2.99/gal. Reformulated gasoline stock for oxygenate blending for May delivery was up only 0.37¢ to a rounded $3.04/gal.

The May natural gas contract also edged up less than a penny to a rounded $4.57/MMbtu.

In London, the May ICE contract for Brent crude delivery declined 33¢, closing at $108.74/bbl. The June contract also closed at $109.36/bbl, increasing 29¢. The ICE gas oil contract for May increased $7.75 to $917.75/tonne.

The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes for Apr. 15 was $105.21/bbl, a gain of 40¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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