Sam Fletcher
Senior Writer
HOUSTON, Jan. 8 -- Energy futures prices dipped Wednesday, despite a government report that US commercial inventories of crude hit a 28-year low last week, slightly below the level considered critical for stable supplies.
The US Energy Information Administration reported early Wednesday that US oil stocks fell by 1.7 million bbl to 269 million bbl during the week ended Jan. 2. The lowest comfort level for US crude stocks is generally considered to be 270 million bbl.
"We doubt very much that the US oil system is running at any more than 1 day of spare inventory above minimum [operating level]," said Paul Horsnell, head of energy research, at Barclays Capital Inc., London.
However, traders focused on the build of US petroleum stocks, Horsnell said. US distillate stocks jumped by 6.4 million bbl to 135.5 million bbl last week, with the increase evenly split between diesel fuel and heating oil, said EIA officials. Gasoline inventories climbed by 2.7 million bbl to 206.3 million bbl.
Energy prices
The February and March contracts for benchmark sweet, light crudes dipped by 8¢ each to $33.62/bbl and $33.40/bbl, respectively, Wednesday on the New York Mercantile Exchange. On the US spot market, West Texas Intermediate at Cushing, Okla., lost 10¢ to $33.63/bbl.
Heating oil for February delivery plunged by 1.13¢ to96.61¢/gal on NYMEX. Unleaded gasoline for the same month lost 0.46¢ to 96.09¢/gal. The February natural gas contract fell by 20.4¢ to $6.88/Mcf Wednesday on NYMEX.
"Weather forecasters say that Arctic weather in the Midwest and Northeast [US] would subside in February, with seasonal to above-seasonal readings expected through the month for the East Coast and the Midwest," said analysts Thursday at Enerfax Daily.
EIA said Thursday that 52 bcf of natural gas were withdrawn from US underground storage during the week ended Jan. 2, down from 80 bcf the previous week and 86 bcf a year ago.
In London, the February contract for North Sea Brent oil slipped by 6¢ to $30.76/bbl Wednesday on the International Petroleum Exchange. Gas oil for January delivery lost $3.25 to $287/tonne. However, the February natural gas contract gained 7.8¢ to the equivalent of $5.36/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes declined by 10¢ to $30.23/bbl Wednesday.
Contact Sam Fletcher at [email protected].
