Sam Fletcher
Senior Writer
HOUSTON, Jan. 28 -- Energy futures prices continued to fall Tuesday as traders' expectations of a bearish build in US inventories of crude and petroleum products from historic lows outweighed forecasts of a major snow storm in the Northeast.
Instead, the US Energy Information Administration reported early Wednesday that commercial US oil inventories fell by 1.5 million bbl to 263.7 million bbl during the week ended Jan. 23—down by 35.8 million bbl below the 5-year average for this time of year.
US distillate fuel stocks plunged by 4.5 million bbl last week, with decreases in both diesel fuel and heating oil, said EIA officials. Gasoline stocks fell by 3.5 million bbl to 206 million bbl during the same period. US gasoline inventories are now 6.6 million bbl below the 5-year average while distillate fuel stocks are 4.1 million bbl above average, EIA said.
Traders were expecting a build of 1-2 million bbl in US crude stocks, along with an increase in distillate inventories. Analysts earlier said that US refiners had responded to recent cold weather by increasing imports to meet surging demand for heating oil. US distillate fuel imports averaged 512,000 b/d last week, "the highest weekly average since the week ended Mar. 7, 2003," EIA confirmed Wednesday.
Crude imports fall
However, US oil imports averaged 8.6 million b/d last week, "down nearly 1.2 million b/d from the previous week and the lowest level since the week ended Mar. 7. Half of the decrease was on the Gulf Coast, which dropped to its lowest level in 3 weeks," officials said. US gasoline imports, including both finished product and blending components, were down by nearly 200,000 b/d to an average 490,000 b/d in the latest period.
Crude inputs into US refineries averaged just over 14.7 million b/d last week, down by 163,000 b/d from the previous week and by 677,000 b/d over the last 3 weeks. "The vast majority of the decline last week was on the West Coast, while crude oil inputs on the Gulf Coast averaged about 7 million b/d, down 116,000 b/d from last week's level," EIA reported.
Meanwhile, utilities in the Southeast US were still struggling Tuesday to restore electrical power to some 250,000 customers after an ice storm downed trees and power lines Monday. The storm was moving up the East Coast with predictions of as much as a foot of snow Wednesday in New York and southern New England.
Energy prices
The March contract for benchmark US light, sweet crudes lost 35¢ to $34.12/bbl Tuesday on the New York Mercantile Exchange, while the April contract fell by 38¢ to $33.26/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., dipped by 5¢ to $34.43/bbl.
Gasoline for February delivery plunged by 1.41¢ to 98.84/gal Tuesday on NYMEX. Heating oil for the same month lost 0.08¢ to 99.24¢/gal. The February natural gas contract lost 1.1¢ to $5.72/Mcf Tuesday, "undermined by technical selling after a morning attempt to rally stalled at resistance," said analysts Wednesday at Enerfax Daily. "The [gas futures] market opened up and quickly hit the high for the day at $5.88[/Mcf] but then began a slide back for most of the day," despite "a firm cash [spot] market and supportive weather forecasts," they said.
In London, futures prices for North Sea Brent oil fell for the third day on expectations of a build in US stocks and indications that members of the Organization of Petroleum Exporting Countries will not decrease production quotas at their February meeting. The March contract for Brent oil declined by 22¢ to $30.23/bbl on the International Petroleum Exchange. Gas oil for February delivery inched up by 50¢ to $273/tonne, but the February natural gas contract plunged by 27¢ to the equivalent of $4.56/Mcf on IPE.
The average price for OPEC's basket of seven crudes lost 18¢ to $29.99/bbl Tuesday, still outside the group's target of $22-28/bbl.
Contact Sam Fletcher at [email protected]
