US light, sweet crude oil and natural gas futures both traded higher on the New York market Jan. 11 after the US Energy Information Administration reported weekly drops in both crude oil supplies and underground gas storage levels.
Hans van Cleef, ABN AMRO senior energy economist, noted in a Jan. 12 research note that US crude inventories dropped for 8 consecutive weeks.
“This is the longest and strongest decline in inventories since 1999,” he said. “West Texas Intermediate prices have risen to $63/bbl, and Brent oil prices have traded even above $69/bbl.”
He said upside potential exists for oil prices, particularly in the second half of the year. ABN AMRO maintained its forecast set in November 2017. That forecast calls for a 2018 average $70/bbl for Brent and $66/bbl for US light, sweet crude.
EIA’s Petroleum Status Report said US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, decreased 4.9 million bbl for the week ended Jan. 5 from the previous week. The latest estimate was 419.5 million bbl (OGJ Online, Jan. 10, 2018).
Separately, EIA’s Weekly Gas Storage Report showed gas storage levels at 2,767 bcf for the week ended Jan. 5, down 359 bcf from the previous week.
Storage was 415 bcf less than for the same week last year and 382 bcf below the 5-year average of 3,149 bcf (OGJ Online, Jan. 11, 2018).
Energy prices
The February light, sweet crude contract on the New York Mercantile Exchange gained 23¢ on Jan. 11 to $63.80/bbl. The March contract increased 26¢ to $63.68/bbl.
The NYMEX natural gas price for February rose nearly 18¢ to $3.08/MMbtu after a draw in underground gas storage levels across the Lower 48.
The Henry Hub cash gas price was $3.24/MMbtu, up 13¢.
Ultralow-sulfur diesel for February fell less than a penny to remain at a rounded $2.08/gal.
The NYMEX reformulated gasoline blendstock for February gained less than a penny to a rounded $1.84/gal.
The Brent crude contract for March on London’s ICE rose 6¢ to settle at $69.26/bbl on Jan. 11. The April contract was up 4¢ to $68.77/bbl.
The gas oil contract for January was $618/tonne, up $5.
The Organization of Petroleum Exporting Countries’ basket of crudes was $67.38/bbl on Jan. 11, up 14¢.
Contact Paula Dittrick at [email protected].
