Sam Fletcher
Senior Writer
HOUSTON, Nov.3 -- Crude, heating oil, and natural gas futures prices pulled back to the lowest levels in months following a Nov. 2 government report of increased commercial US crude and gasoline inventories.
The Energy Information Administration said crude stocks increased by 2.7 million bbl to 319.1 million bbl, while gasoline stocks rose by 1 million bbl to 196.9 million bbl. However, distillate fuel inventories dipped by 200,000 bbl to 120.9 million bbl during the same period.
EIA expects strong imports of distillate fuel, including heating oil and diesel, by the US this winter, particularly from Asia. However, in recent testimony before the House Energy subcommittee, Bob Slaughter, president of the National Petrochemical & Refiners Association, said distillate imports likely will come from the Virgin Islands, Canada, and also Europe if the winter there is not severe.
Meanwhile, the US Minerals Management Service said crews still had not returned to 5 drilling rigs and 210 production platforms in the Gulf of Mexico and that 957,978 b/d of crude and more than 5 bcfd of natural gas remained shut in as of Nov. 2 in the wakes of Hurricanes Katrina and Rita. Cumulative production lost from those waters since Aug. 26 now totals 76.6 million bbl of crude and 391.4 bcf of gas. That's equivalent to 14% of the crude and 10.7% of the gas produced annually from the Gulf of Mexico.
The Louisiana Department of Natural Resources said Nov. 2 that production of 97,917 b/d of crude and more than 1 bcfd of natural gas has been restored onshore and in state waters in 38 southern parishes in that state. That amounts to 48.2% of the crude production and 45.1% of the gas production from that region prior to Hurricane Katrina. Of the 55 onshore pipeline operators in the 38 parishes affected by hurricanes, 7 reported their lines are back in operation, 16 reported partial operations, and 32 said their systems were still shut in Nov. 2.
Energy prices
The December contract for benchmark US sweet, light crudes hit a new 3-month low for the front-month position on the New York Mercantile Exchange, trading at $58.75-$60.40/bbl before closing at $59.75/bbl, down 10¢ for the day. The January crude position retreated by 5¢ to $60.49/bbl. Gasoline for December delivery lost 3.45¢ to $1.57/gal on NYMEX. Heating oil for the same month fell by 2.21¢ to a 3-month low of $1.78/gal.
The December natural gas contract tumbled to a new 2-month low, down by 25.6¢ to $11.60/MMbtu, "despite a higher cash [spot] market," said analysts at Enerfax Daily. EIA said Nov. 3 that 29 bcf of natural gas was injected into US underground storage in the week ended Oct. 28. That was below the consensus of Wall Street analysts and down from injections of 77 bcf the previous week and 44 bcf during the same period last year. Prior to the Nov. 1 start of the winter heating season, US natural gas storage was at 3.2 tcf, down by 119 bcf from a year ago but 79 bcf above the 5-year average.
In London, the December contract for North Sea Brent crude inched up by 1¢ to $58.38/bbl on the International Petroleum Exchange. Gas oil for November delivery lost $15.50 to $530.25/tonne.
The Vienna headquarters of the Organization of Petroleum Exporting Countries was closed Nov. 3, so no update of the average price for its basket of 11 benchmark crudes was available.
Contact Sam Fletcher at [email protected].
