Sam Fletcher
Senior Writer
HOUSTON, Mar. 3 -- Gasoline futures for April delivery hit a record near-month high Mar. 2 on the New York Mercantile Exchange, pulling the near-month crude futures price above $53/bbl for the first time since October.
That followed reports of refinery outages in Texas and California. Moreover, the Energy Information Administration said Mar. 2 that input into US refineries fell by 81,000 b/d to 14.9 million b/d with refineries operating at 89.3% of capacity during the week ended Feb. 25.
EIA said commercial US crude inventories jumped by 2.4 million bbl to 299.4 million bbl in that same period, while gasoline stocks were up by 1 million bbl to 224.5 million bbl. However, Distillate fuel stocks fell by 1.8 million bbl to 110 million bbl, with the decline equally split between heating oil and diesel fuel. US imports of crude increased by 422,000/b/d to nearly 10.1 million b/d.
Energy prices
The April contract for benchmark US light, sweet crudes jumped by $1.37 to $53.05/bbl Mar. 2 on NYMEX, while the May contract advanced by $1.31 to $53.62. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by $1.37/bbl to $53.06/bbl. Gasoline for April delivery escalated by 8.11¢ to a record high of $1.48/gal. Heating oil for the same month increased by 4.33¢ to a 4-month high of $1.51/gal. Meanwhile, the approach of springtime "won't be enough to drag heating oil futures below $1/gal any time soon," said analysts Mar. 3 at Enerfax Daily. "Growing global demand for distillates like diesel, along with sky-high crude prices, will keep heating oil futures unseasonably strong into summer, underscoring a growing disconnection of heating oil prices and traditional weather-driven consumption."
Although winter weather in the US has averaged warmer than normal this year, Enerfax analysts noted, "Heating oil prices have hit record levels on the NYMEX for this time of year, thanks largely to heavy consumption of diesel and crude oil prices over $50/bbl. March roared in like a lion in the Northeast, ensuring a late-season spike in heating fuel demand and giving extra support to prices."
The April natural gas contract was up by 3.7¢ to $6.72/MMbtu on Mar. 2, rebounding "on a substantial rally in crude oil and refined products," said Enerfax analysts. On Mar. 3, EIA reported 107 bcf of gas was withdrawn from US underground storage during the week ended Feb. 25. That compared with withdrawals of 88 bcf the previous week and 96 bcf a year ago. US gas storage now stands at 1.6 tcf, up by 415 bcf from a year ago and 358 bcf above the 5-year average.
In London, the April contract for North Sea Brent crude gained $1.11 to $51.32/bbl Mar. 2 on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes rebounded by 84¢ to $47.01/bbl after losing 9¢ on Mar. 1. "That small fall brought to an end a remarkable run of no fewer than 14 successive increases in the value of the OPEC basket," said Paul Horsnell, Barclays Capital Inc., London. "Over the course of the remorseless run up, the value increased by $6.47[/bbl] and was taken to within 35¢ of its all-time high."
Meanwhile, Adnan Shihab-Eldin, OPEC's acting secretary general and director of its research division, said Mar. 3 that one cannot completely rule out the possibility that the price equivalent of WTI might reach $80/bbl as some have speculated, if there is a major supply disruption. However, he said, even price levels of $50-60/bbl over an extended period would produce significant changes in both supply and demand, bringing prices back to more sustainable levels.
Contact Sam Fletcher at [email protected]
