MARKET WATCH: Oil futures drop slightly in mixed July 1 energy market

Crude oil prices for August delivery fell marginally on the New York market July 1 while other energy commodity prices were mixed upon what analysts called easing short-term worries over Iraqi oil supply and as US market participants awaited a weekly government inventory report.

Meanwhile, the international market appeared to be influenced little by the end of a ceasefire in Ukraine.

“There’s no lack of bullish headlines, but the market seems to not care,” said Stephen Schork, president of the Schork Report. “We’re in the midst of a correction. We’re at where we were a few weeks ago when the Iraq news broke.”

Inventory report released

The Energy Information Administration on July 2 reported US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 3.2 million bbl for week ended June 27 compared with the previous week.

At 384.9 million bbl, crude oil inventories are above the upper limit of the average range for this time of year, EIA said in its weekly petroleum report. Separately, the American Petroleum Institute estimated crude supplies fell 875,000 bbl last week.

Total US motor gasoline inventories decreased by 1.2 million bbl for the week ended June 27, which EIA called the middle of the average range. Both finished gasoline inventories and blending components inventories decreased.

Distillate fuel inventories increased by 1 million bbl and are near the lower limit of the average range for this time of year. Propane-propylene inventories rose 2.6 million bbl and are in the upper half of the average range, EIA said.

Refinery inputs averaged over 16.2 million b/d during the week ending June 27, which was 546,000 b/d more than the previous week’s average. Refineries operated at 91.45% of capacity.

Gasoline production increased last week, averaging over 9.4 million b/d. Distillate fuel production increased, averaging 5 million b/d.

US crude oil imports averaged about 7.3 million b/d for the week ended June 27, down by 76,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged over 7.2 million b/d, which EIA said was 9.4% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 512,000 b/d. Distillate fuel imports averaged 79,000 b/d last week.

Energy prices

The New York Mercantile Exchange August crude oil contract fell 3¢ to $105.34/bbl on July 1. The September contract rose 1¢ to $104.74/bbl.

The natural gas contract for August declined less than a penny to a rounded $4.46/MMbtu. On the US cash market, gas at Henry Hub, La., was $4.43/MMbtu, up 1¢.

Heating oil for August delivery edged up by less than cent to a rounded $2.98/gal. Reformulated gasoline stock for oxygenate blending for August delivery dropped less than a penny to a rounded $3.04/gal. The July contracts expired at settlement on June 30.

Gasoline futures climbed in early July 2 trading following earlier reports from the National Hurricane Center that Tropical Storm Arthur had developed off Florida. Forecasters expected the first named storm of the 2014 Atlantic hurricane season would move north along the East Coast.

The August ICE contract for Brent crude delivery declined 7¢, closing at $112.29/bbl. The September contract climbed 3¢ to $112.10/bbl. The ICE gas oil contract for July dropped $1 to $914/tonne.

The Organization of Petroleum Exporting Countries basket of 12 benchmark crudes for July 1 was $108.68/bbl, up 9¢ from June 30.

Contact Paula Dittrick at paulad@ogjonline.com.

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