Light, sweet crude oil prices for March delivery declined slightly on Feb. 15 to settle above $53/bbl despite a hike in the US oil inventory. Analysts said oil prices held steady because of growing optimism that the Organization of Petroleum Exporting Countries was complying with production cuts.
US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 9.5 million bbl for the week ended Feb. 10 to 518.1 million bbl, the US Energy Information Administration said. The latest total was the largest that EIA has reported since 1982 (OGJ Online, Feb. 15, 2017).
Anthony Starkey, energy analysis manager for Platts Analytics, the forecasting and analytics unit of S&P Global Platts, said the latest estimate “puts US crude inventories at their highest level ever.”
He said, “This large build was realized despite a drop in imports of 880,000 b/d, and estimated crude exports in excess of 1 million b/d. This is by far the largest amount of crude ever exported from the US.”
Starkey noted a drop in refinery runs offset lower imports and higher exports.
The Petroleum Status Report estimated total US production at 8.977 million b/d for the week ended Feb. 10, down 1,000 b/d from Feb. 3. Production from Alaska fell 7,000 b/d while production across the Lower 48 gained 6,000 b/d for the week ended Feb. 10, EIA said.
Reuters reported Feb. 16 that OPEC sources said the cartel could extend the 6-month production-cut arrangement or possibly make more cuts if world oil supply failed to fall as hoped.
“It’s not something totally new, but it’s a headline and the market reacts to headlines,” said Olivier Jakob, managing director of consultancy Petromatrix. Investors previously expected OPEC might extend production cuts.
Energy prices
The crude oil contract for March delivery on the New York Mercantile Exchange dropped 9¢ on Feb. 15 to $53.11/bbl. The April contract was down 11¢ to $53.60/bbl.
US natural gas futures for March delivery rose 2¢ to a rounded $2.92/MMbtu. The spot gas price at the Henry Hub in Cushing, Okla., gained 6¢ to $2.92/MMbtu.
Heating oil for March edged down nearly a penny to a rounded $1.63/gal. Reformulated gasoline stock for oxygenate blending for March gained by less than a penny to remain at a rounded $1.55/gal.
The Brent crude contract for April on London’s ICE was down 22¢ to $55.75/bbl. The Brent May contract fell 19¢ to $56.10/bbl. Gas oil for March closed at $494/tonne, down $3.25.
The average price for OPEC’s basket of benchmark crudes on Feb. 15 was $53.10/bbl, down 21¢.
Contact Paula Dittrick at [email protected].