MARKET WATCH: Oil prices continue down on London, New York markets

Crude oil prices on the New York market dropped modestly on July 8, settling down for the seventh consecutive session while oil prices on the London market dropped by more than $1/bbl, marking Brent’s sixth consecutive trading session that ended with a decline.

Analysts attributed Brent’s steep decline to the likelihood that additional Libyan oil supplies will hit the world oil market. Libya’s government confirmed the reopening of two ports (OGJ Online, July 8, 2014).

The Energy Information Administration estimated US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, decreased by 2.4 million bbl for the week ended July 4 from the previous week.

At 382.6 million bbl, oil inventories are above the upper limit of the average range for this time of year, the weekly petroleum status report said.

Total motor gasoline inventories increased 600,000 bbl last week, which EIA called the middle of the average range. Finished gasoline inventories increased while blending components inventories decreased last week.

Distillate fuel inventories increased 200,000 bbl last week but are near the lower limit of the average range for this time of year. Propane-propylene inventories rose 3.8 million bbl last week and are in the upper half of the average range.

US refinery inputs averaged about 16.3 million b/d for the week ended July 4, which EIA said was 34,000 b/d more than the previous week’s average. Refineries operated at 91.6% of capacity last week.

Gasoline production decreased slightly, averaging more than 9.4 million b/d, while distillate fuel production increased, averaging 5.1 million b/d, EIA said.

US crude oil imports averaged 7.3 million b/d, up 20,000 b/d. Over the last 4 weeks, oil imports averaged 7.3 million b/d, which was 8% below the same 4-week period last year, EIA said. Total motor gasoline imports, including finished gasoline and blending components, averaged 609,000 b/d.

Energy prices

The New York Mercantile Exchange August crude oil contract declined 13¢ on July 8, closing at $103.40/bbl. The September contract dropped 24¢ to $102.79/bbl.

The natural gas contract for August fell 2.1¢ to a rounded $4.20/MMbtu. On the US cash market, gas at Henry Hub, La., was $4.16/MMbtu on July 8, down 9¢.

Heating oil for August delivery fell a rounded 4.1¢ to $2.87/gal. Reformulated gasoline stock for oxygenate blending for August delivery dropped 1.6¢ to $2.97/gal.

The August ICE contract for Brent crude delivery dipped by $1.30/bbl, closing at $108.94/bbl. The September contract dropped $1.12 to $109.06/bbl. The ICE gas oil contract for July declined $8.75 to $887.50/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 8 was $106.25/bbl, down 64¢ from July 7.

Contact Paula Dittrick at paulad@ogjonline.com.

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