Oil prices rose on the New York market Mar. 4 after a weekly US government oil and product report showed inventories at the Cushing hub in Oklahoma increased less than expected by some analysts for the week ended Feb. 27, easing concerns that storage might fill to capacity during April.
The US Energy Information Administration said supplies at Cushing rose by 500,000 bbl, which was less than analysts had expected. Total capacity at Cushing is 71 million bbl (OGJ Online, Mar. 4, 2015).
CME Group, which owns the New York Mercantile Exchange, separately announced plans to launch the first oil-storage futures contract on Mar. 29, pending regulatory approvals. Each futures contract represents the right to store 1,000 bbl of sour crude at LOOP LLC’s Clovelly hub at Clovelly, La.
Louisiana Offshore Oil Port (LOOP) is the largest privately owned US crude oil terminal. It offloads foreign crude oil from tankers and provides storage and distribution inventory via pipelines to refineries.
A LOOP spokesman said 7 million bbl of storage capacity was available for the physically delivered crude oil storage contract. Plans call for NEO Markets Inc. to be the online market for the crude oil storage futures contract. Trading is scheduled to begin Sunday, Mar. 29, for the Mar. 30 trade date.
The contract will be named LOOP Gulf Coast Sour Crude Oil futures, a CME news release said.
The US oil market flipped into a contango late last year, setting up trading opportunities to buy oil at current prices to be stored and sold later at a higher price.
On Mar. 5, EIA issued the weekly gas storage report, which showed a draw in supplies.
EIA estimated gas in underground storage across the Lower 48 at a rounded 1.7 tcf as of Feb. 27, which was a net decline of 228 bcf from the previous week. Stocks were 492 bcf higher than last year at this time and 143 bcf below the 5-year average of 1.85 tcf.
Separately, Libya’s National Oil Co. on Mar. 4 declared a force majeure on 11 oil fields in the central part of that country following a series of attacks by militants. NOC said it was no longer able to ensure security in the fields.
Energy prices
The New York Mercantile Exchange April crude oil contract was up $1.01 to $51.53/bbl Mar. 4, and the May contract increased 73¢ to $53.23/bbl.
The natural gas contract for April rose 5.7¢ to a rounded $2.77/MMbtu. The Henry Hub, La., gas price was $3.26/MMbtu, up 33¢.
Heating oil for April dropped 3.8¢ to a rounded $1.90/gal. Reformulated gasoline stock for oxygenate blending for April delivery was down 2.4¢ to a rounded $1.93/gal.
The April ICE contract for Brent crude oil declined 47¢, settling at $60.55/bbl, and the May contract dropped 57¢ to $61.21/bbl. The ICE gas oil contract for March decreased $8 to $577.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Mar. 4 was $55.81/bbl, down 13¢.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.
