Light, sweet crude prices for February on the New York market and Brent crude oil prices in London each dropped by more than $1/bbl in Dec. 30 trading after a US government report showed oil supplies had unexpectedly climbed again.
The US Energy Information Administration estimated commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 2.6 million bbl for the week ended Dec. 25 from the previous week. The latest total was 487.4 million bbl, the Petroleum Status Report showed.
Analysts surveyed by the Wall Street Journal in advance of the report’s release said they had expected crude supplies would fall by 1 million bbl for the week.
“The year is closing out with crude oil prices at recent record lows…reflecting ongoing global oversupply of 1-1.5 million b/d,” Eric Lee, analyst at Citi, told the WSJ.
As of early Dec. 31, the WSJ reported the Brent crude oil price was on course to fall by 37% for the year, while the US light, sweet crude futures price was down 32% from 2014.
ING Bank analysts lowered their forecast for the 2016 average Brent crude oil price to $53/bbl compared with an earlier forecast of $58/bbl.
Meanwhile, it appeared the first cargo of freely traded US crude oil exports in decades could leave as soon as New Year’s Eve. Earlier this month, President Barack Obama signed legislation lifting a 40-year-old ban on exporting domestically produced crude oil.
ConocoPhillips and NuStar Energy LP said a tanker of US crude could leave NuStar’s dock in Corpus Christi, Tex., as early as Dec. 31. The oil was produced from the South Texas Eagle Ford shale.
Meanwhile, Enterprise Products Partners LP maintained its plans to load a cargo of US crude oil for export in Houston during early January.
Regarding natural gas in underground storage across the Lower 48, EIA estimated levels at 3.756 tcf as of Dec. 25, which was a net decline of 58 bcf from the previous week. Stocks were 532 bcf higher than last year at this time and 448 bcf above the 5-year average of 3.308 tcf, the Gas Storage Report said.
Energy prices
The February crude oil contract on the New York Mercantile Exchange declined $1.27 to settle Dec. 30 at $36.60/bbl. The March contract was down $1.22 to settle at $37.64/bbl.
The NYMEX natural gas contract for February fell 15.6¢ to a rounded $2.21/MMbtu. The Henry Hub gas price was $2.24/MMbtu on Dec. 29, and the Dec. 28 price remained unavailable.
Heating oil for January delivery declined 5¢ to a rounded $1.08/gal. The price for reformulated gasoline stock for oxygenates blending for January was down 4.6¢ to a rounded $1.23/gal.
The February ICE contract for Brent crude dropped $1.33 to $36.46/bbl, and the March contract was down by $1.35 to $36.87/bbl. The ICE gas oil contract for January was $331.25/tonne on Dec. 30, down $10.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Dec. 30 was unavailable.
Contact Paula Dittrick at [email protected].
