MARKET WATCH: NYMEX oil futures up slightly awaiting inventory report

Oil futures prices rose modestly on the New York market on June 3 as analysts correctly anticipated a drop in US oil inventories.

The Energy Information Administration reported US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 3.4 million bbl for the week ended May 30 compared with the previous week.

At 389.5 million bbl, the latest estimated US crude oil inventory level was near the upper limit of the average range for this time of year, EIA said.

Before EIA issued its weekly petroleum report, the Wall Street Journal surveyed 13 analysts who expected the oil inventory would have fallen by 100,000 bbl for the week ended May 30 compared with the previous week.

Separately, the American Petroleum Institute said its own information showed a decrease of 1.4 million bbl for the week ended May 30.

During June 3 NYMEX trading, natural gas futures climbed, which analysts attributed to a variety of factors, including a low-pressure system over the Gulf of Mexico.

On June 2, a Colorado State University hurricane forecasting team said it now expects 10 named storms during 2014 with four becoming hurricanes of which one is expected to be Category 3 or higher on the Saffir-Simpson scale.

Still, the hurricane forecasters expect a below-average hurricane season. In April, the team had forecast nine named storms of which three would develop into hurricanes.

Forecasters said El Nino is developing slower than expected, and that pace combined with a warming Atlantic Ocean, could lead to a hotter, stormier summer than previously expected.

US gasoline stocks climb

EIA said total US motor gasoline inventories increased by 200,000 bbl for the week ended May 30, putting levels in the middle of the average range. Finished gasoline inventories increased while blending components inventories decreased last week.

Distillate fuel inventories increased by 2 million bbl last week but are below the lower limit of the average range for this time of year. Propane-propylene inventories climbed by 3.7 million bbl last week and are in the middle of the average range, EIA said.

US refinery inputs averaged about 16.1 million b/d during the week ended May 30, which was 206,000 b/d more than the previous week’s average. Refineries operated at 90.8% of capacity.

Gasoline production decreased, averaging 9.5 million b/d. Distillate fuel production increased last week, averaging over 5.2 million b/d.

US crude oil imports averaged over 7.1 million b/d, down by 686,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged over 7.1 million b/d, which was 7.5% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 844,000 b/d and distillate fuel imports averaged 182,000 b/d.

Energy prices

The New York Mercantile Exchange July crude oil contract price gained 19¢, closing at $102.66/bbl on June 3. The August contract added 18¢ to settle at $101.97/bbl.

The natural gas contract for July gained 1.7¢ to settle at a rounded $4.63/MMbtu on NYMEX. On the US cash market, gas at Henry Hub, La., gained 6¢ to $4.59/MMbtu.

Heating oil for July delivery lost 1¢ to a rounded $2.86/gal. Reformulated gasoline stock for oxygenate blending for July delivery relinquished less than 1¢ to remain at a rounded $2.95/gal.

The July ICE contract for Brent crude delivery edged down 1¢, closing at $108.82/bbl, while the August contract dropped 3¢ to settle at $108.13/bbl. The ICE gas oil contract for June gave up $5.75 to settle at $884.50/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $105.14 on June 3, down 46¢ from June 2.

Contact Paula Dittrick at paulad@ogjonline.com.

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