Light, sweet crude oil prices for April delivery dropped slightly for a second consecutive day on Mar. 7 pending release of the weekly US government oil and product inventory from the US Energy Information Administration.
A Wall Street Journal survey of traders and analysts in advance of the report’s release said they expect EIA will estimate oil supplies, excluding the Strategic Petroleum Reserve, increased 1.7 million bbl for week ended Mar. 3.
Separately, the American Petroleum Institute on Mar. 7 said its preliminary estimate is that US crude oil inventories jumped 11.6 million bbl for the week ended Mar. 3.
S&P Global Platts Oil Futures Editor Geoffrey Craig referred to EIA records for context. He said that US crude oil stocks rose an average 2 million bbl for the week during the last half of February compared with an average 9 million bbl gain during the same time period in 2012-16.
Analysts surveyed Mar. 6 by S&P Global Platts expect US oil supplies increased 1.6 million bbl for the week ended Mar. 3. The 5-year average would be an increase of 3.9 million bbl.
Regarding world oil markets, RBC Capital Markets LLC issued a research note about oil exports being halted from two major ports in Libya. RBC analysts foresee “considerable downside production risk,” during 2017 (OGJ Online, Mar. 7, 2017).
Helima Croft, RBC global head of commodity strategy, said, “We have consistently cautioned that Libya would face ongoing instability given political dysfunction and numerous security concerns.”
She said the situation “remains extremely fluid, and even if this crisis were resolved swiftly, we would strongly caution against assuming that Libya is out of the woods. With three rival governments, extremely weak state institutions, and an abundance of armed actors, Libya is anything but a stable and reliable producer.”
Energy prices
The crude oil contract for April delivery on the New York Mercantile Exchange dropped 6¢ on Mar. 7 to $53.14/bbl. The May contract was down 7¢ to $53.64/bbl.
The natural gas price for April declined nearly 8¢ to a rounded $2.82/MMbtu. The cash gas price at the Henry Hub closed at $2.58/MMbtu, down 10¢.
Heating oil for April delivery climbed 1¢ to a rounded $1.61/gal. Reformulated gasoline stock for oxygenate blending for April gained nearly 1¢ to a rounded $1.68/gal.
The Brent crude contract for May delivery on London’s ICE was down 9¢ to $55.92/bbl. The Brent June contract dropped 13¢ to $56.13/bbl. Gas oil closed at $487.75/tonne, up $1.
The average price for OPEC’s basket of benchmark crudes on Mar. 7 was $53.54/bbl, up 41¢.
Contact Paula Dittrick at [email protected].
