Crude oil prices gained in New York and London on Oct. 24 on optimism that measures will continue to be taken by major producers to balance world markets. However, prices eased on Oct. 25 as traders awaited US inventory data.
Saudi Energy Minister Khalid al-Falih told Reuters during an investment conference in Riyadh on Oct. 24 that the Organization of Petroleum Exporting Countries remains “determined to do whatever it takes to bring global inventories down to the normal level, which we say is the 5-year average.”
Most OPEC members and several major non-OPEC producing countries joined forces late last year to cut output by a combined 1.8 million b/d. The group later extended the agreement through March 2018.
Higher oil prices over the last few weeks have been supported by the fallout of a nonbinding independence referendum in Iraq’s northern semiautonomous Kurdish region (OGJ Online, Oct. 24, 2017). Four consecutive weekly declines in US crude inventories also have contributed.
That trend in the US, which has been accompanied by rising gasoline inventories, reversed last week, according to US Energy Information Administration data (OGJ Online, Oct. 18, 2017).
US commercial oil stockpiles increased 900,000 bbl during the week ended Oct. 20 compared with the previous week’s total, EIA’s Weekly Petroleum Status Report indicates. At 457.3 million bbl, US crude stocks remain in the upper half of the average range for this time of year.
Total motor gasoline inventories fell 5.5 million bbl last week but are in the upper half of the average range, EIA reported. Distillate fuel inventories dropped 5.2 million bbl and are in the lower half of the average range for this time of year.
EIA’s data were in line with separate estimates from the American Petroleum Institute that showed a US oil-inventory increase of 520,000 bbl during the week along with gasoline and distillate stockpiles respectively falling 5.8 million bbl and about 5 million bbl.
US crude production has recouped the losses it took from shut-ins ahead of Hurricane Nate earlier this month. Overall US output jumped 1.1 million b/d to 9.5 million b/d during the week ended Oct. 20.
Energy prices
The December light, sweet crude contract on the New York Mercantile Exchange gained 57¢ to $52.47/bbl on Oct. 24. The January 2018 contract rose 59¢ to $52.67/bbl.
The NYMEX natural gas price for November edged down 1.7¢ to a rounded $2.97/MMbtu. The Henry Hub cash gas price decreased 2¢ to $2.92/MMbtu.
Heating oil for November increased 3.4¢ to a rounded $1.82/gal. The NYMEX reformulated gasoline blendstock for November rose 3.7¢ to a rounded $1.72/gal.
The Brent crude contract for December on London’s ICE gained 96¢ to $58.33/bbl. The January contract was up 90¢ to $58.17/bbl. The gas oil contract for November dropped $2.25 to $526/tonne.
OPEC’s basket of crudes for Oct. 24 was $55.59/bbl, down 18¢.
Contact Matt Zborowski at [email protected].
