Light, sweet crude oil prices gained July 12 on the New York market after the US Energy Information Administration reported US crude oil supplies fell by 7.6 million bbl for the week ended July 7.
The draw was more than double the decline anticipated by analysts surveyed by The Wall Street Journal in advance of EIA’s Petroleum Status Report. The American Petroleum Institute had estimated a draw of 8.1 million bbl for the week ended July 7.
US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, dropped 7.6 million bbl during the week ended July 7 compared with the previous week. EIA said the estimated 495.4 million bbl puts US crude stockpiles in the upper half of the average range for this time of year.
Separately, the EIA’s Short-Term Energy Outlook said US production is expected to grow during 2018 although at a lower rate than previously estimated (OGJ Online, July 12, 2017).
EIA revised its outlook to a 2018 production forecast of 9.9 million b/d from its earlier forecast of about 10 million b/d. The 2017 production forecast is 9.3 million b/d.
The Petroleum Status Report estimated US production for the week ended July 7 at 9.397 million b/d, up 59,000 b/d from the previous week. Alaska production was 457,000 b/d up 34,000 b/d. Oil production across the Lower 48 was up 25,000 b/d for the week to 8.940 b/d.
“There’s been speculation of how long US production would continue…to rise considering the selloff we’ve seen in recent months,” said Ole Hansen, Saxo Bank head of commodity strategy. He called the STEO report “the first official sign that there could be some downgrades coming.”
Market observers also awaited any clues about future US interest rates. US Federal Reserve Chair Janet Yellen was scheduled July 13 to give a second day of her semiannual congressional testimony.
Energy prices
The August light, sweet crude contract on NYMEX gained 45¢ on July 12 to settle at $45.49/bbl. The September contract was up 43¢ to close at $45.66/bbl.
The NYMEX natural gas price for August fell 6¢ to $2.98/MMbtu. The Henry Hub cash gas price was $2.98/MMbtu, down 1¢.
Heating oil futures for August edged down a fraction of a penny to a rounded $1.47/gal. Reformulated gasoline stock for oxygenate blending for August rose less than 1¢ to remain at a rounded $1.52/gal.
The Brent crude contract for September on London’s ICE gained 22¢ to $47.74/bbl while the October contract was up 22¢ to $48.03/bbl. The August gas oil contract was $437.25/tonne, up $3.50.
The Organization of Petroleum Exporting Countries’ basket of crudes on July 12 was $46.02/bbl, up $1.23.
Contact Paula Dittrick at [email protected].
