Sam Fletcher
Senior Writer
HOUSTON, Jan. 12 -- Energy prices generally increased Jan. 11 as traders became more concerned about supply disruptions.
War, weather, and other causes recently combined to shut in some crude production in Iraq, Norway, and Nigeria. Even the US portion of the Gulf of Mexico is still feeling the impact of production lost to Hurricane Ivan in mid-September. Officials estimate total production is down by as much as 1 million b/d worldwide at the moment.
Meanwhile, Saudi Arabia on Jan. 11 unexpectedly announced big cuts in its February crude supplies to international oil companies. Some European-based traders confirmed allocation cuts of 30-50%.
In addition, Qatar's Oil Minister Abdulla bin Hamad al-Attiyah said the Organization of Petroleum Exporting Countries may consider lowering its current production quota of 27 million b/d at its next meeting Jan. 30. He estimated 1.5 million b/d of excess crude is now in the world market.
On Jan. 12, the Energy Information Administration reported commercial US inventories of crude fell by 3 million bbl to 288.8 million bbl during the week ended Jan. 7. Distillate fuel stocks increased by 1.9 million bbl during the same period, with a gain in diesel fuel more than compensating for a slight decline in heating oil. Gasoline stocks were up by 1 million bbl to 215.3 million bbl.
Crude input into US refineries was down by 186,000 b/d to 15.6 million b/d during the first week of January, with refineries running at 94% capacity. Distillate fuel production tied the previous week's production record, averaging nearly 4.3 million b/d.
Energy prices
The February contract for benchmark US light, sweet crudes increased by 35¢ to $45.68/bbl Jan. 11 on the New York Mercantile Exchange while the March contact gained 34¢ to $45.91/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by 15¢ to $45.69/bbl.
Heating oil for February delivery increased by 1.73¢ to $1.29/gal Jan. 11 on NYMEX. Gasoline for the same month inched up by 0.2¢ to $1.21/gal. The February natural gas contract lost 6.4¢ to $6.10/MMbtu, "despite a very cold outlook for later this week and early next week," said analysts at Enerfax Daily.
In London, the February contract for North Sea Brent crude was up by 20¢ to $43.12/bbl on the International Petroleum Exchange.
However, the average price for OPEC's basket of seven benchmark crudes fell by 67¢ to $39.45/bbl on Jan. 11.
Contact Sam Fletcher at [email protected]
