MARKET WATCH: NYMEX oil prices boosted by crude inventory drop

Crude oil futures prices climbed more than $1/bbl on the New York market during May 21 trading after a weekly government report showed an unexpected drop in US oil inventories.

The US Energy Information Administration said oil stockpiles fell 7.2 million bbl for the week ended May 16, the biggest weekly decline in more than 4 months (OGJ Online, May 21, 2014). Meanwhile, natural gas storage numbers are rising.

In the weekly report on working gas in underground storage in the Lower 48, EIA estimated levels at 1.266 tcf as of May 16, a net increase of 106 bcf from the previous week. Stocks were 774 bcf less than last year at this time and 943 bcf below the 5-year average of 2.209 tcf, EIA said.

On international oil markets, the Brent crude price rose with the release of a monthly index showing China’s factory activity stabilized in May, which analysts say suggests increasing demand for petroleum products in China.

The HSBC China Manufacturing Purchasing Managers Index (PMI) rose to 49.7 in May from 48.1 in April, the highest level in 5 months. Analysts say a PMI index number below 50 indicates contraction.

In Libya, Total SA said it was pulling some expatriate employees from Libya amid escalating violence between different militia groups.

“We have reduced our presence in Tripoli, which was already limited, to the minimum,” a Total spokesman told the Wall Street Journal. He noted Total is not pulling out of Libya. Spain’s Repsol reportedly also is withdrawing some expatriate staff, although the company refused to discuss details for security reasons, the WSJ said.

Energy prices

The New York Mercantile Exchange July crude oil contract price jumped $1.74 to close at $104.07/bbl on May 21. The August contract gained $1.66 to $103.16/bbl.

The June natural gas contract dropped 7.9¢ to a rounded $4.47/MMbtu.

Heating oil for June delivery gained less than a penny to remain at a rounded $2.95/gal. Reformulated gasoline blendstock rose 3¢ to a rounded $2.99/gal.

In London, the July ICE contract for Brent crude delivery was up 86¢, closing at $110.55/bbl. The August contract increased 83¢ to settle at $109.74/bbl. The ICE gas oil contract for June gained $5 to $914.25/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on May 21 was $106.82/bbl, up 64¢.

Contact Paula Dittrick at

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