The crude oil contract price for July delivery fell modestly June 10 yet still hovered above $104/bbl on the New York market as participants awaited the start of a meeting of Organization of Petroleum Exporting Countries members in Vienna as well as a weekly government report on US petroleum inventories.
OPEC delegates met in Vienna June 11 and agreed to keep the cartel’s official output quota at 30 million b/d, which is what analysts had expected. OPEC’s next semiannual meeting is scheduled for Nov. 27 in Vienna.
OPEC reviewed oil market developments and world economic growth, including supply-demand projections for the second half of this year and the outlook for 2015.
“Relative steadiness of prices during 2014 to date is an indication that the market is adequately supplied, with the periodic price fluctuations being more a reflection of geopolitical tensions than a response to fundamentals,” OPEC said in a statement after the meeting.
World oil demand is expected to rise to 91.1 million b/d in 2014 from 90 million b/d in 2013, OPEC said, adding that non-OPEC supply is projected to increase by 1.4 million b/d. OPEC concluded that inventories for Organization for Economic Cooperation and Development members, in terms of forward-demand cover days, remains comfortable.
Oil traders also monitored news from Iraq where militants seized control of Mosul in northern Iraq, prompting Iraqi Oil Minister Abdul Kareem Luaiby to say the violence was unlikely to reach oil fields in southern Iraq.
“The accident is only in the north of Iraq…the south is a very, very safe area,” he told reporters in Vienna before the OPEC meeting.
He also said tensions in Mosul would not change oil exports because the country’s northern oil fields already were shut in as a result of repeated attacks on a pipeline that runs north to Turkey.
A weekly US government petroleum report showed crude oil inventories decreased while product inventories increased.
The Energy Information Administration estimated US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 2.6 million bbl for the week ended June 6 compared with the previous week.
At 386.9 million bbl, crude oil inventories are in the upper half of the average range for this time of year.
Gasoline supplies increase
Total US motor gasoline inventories increased 1.7 million bbl last week, and EIA described that level as the middle of the average range. Finished gasoline inventories decreased while blending components inventories increased. Distillate fuel inventories increased 900,000 bbl, but EIA said that level is still below the lower limit of the average range for this time of year.
Propane-propylene inventories rose 3.4 million bbl, which EIA called the upper half of the average range.
Refinery inputs averaged more than 15.5 million b/d during the week ended June 6, which was 510,000 b/d less than the previous week’s average. Refineries operated at 87.9% of capacity. Gasoline production decreased last week, averaging about 8.9 million b/d while distillate fuel production also decreased, averaging about 4.9 million b/d.
US crude oil imports averaged more than 7.1 million b/d for the week ended June 6, up 23,000 b/d from the previous week. During 4 weeks, crude oil imports averaged more than 7.1 million b/d, 8.1% below the same 4-week period last year. Total motor gasoline imports, including both finished gasoline and gasoline blending components, averaged 560,000 b/d. Distillate fuel imports averaged 106,000 b/d.
The New York Mercantile Exchange July crude oil contract price dropped 6¢, closing at $104.35/bbl on June 10. The August contract gave up 10¢ to $103.49/bbl.
The natural gas contract for July fell by 11.5¢ to $4.53/MMbtu. On the US cash market, gas at Henry Hub, La., was $4.57/MMbtu, down 9¢.
Heating oil for July delivery decreased by 0.7¢ to a rounded $2.88/gal. Reformulated gasoline stock for oxygenate blending for July delivery dropped 1¢ to a rounded $2.97/gal.
The July ICE contract for Brent crude delivery fell 47¢, closing at $109.52/bbl. The August contract declined 29¢ to $108.86/bbl. The ICE gas oil contract for June was down $7.50 to $884.75/tonne.
The OPEC basket of 12 benchmark crudes was $105.89/bbl on June 10, up 17¢.
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