MARKET WATCHCrude stock build lowers prices

Dec. 8, 2005
Crude prices dropped Dec. 7 on news of a build in US oil inventories and indications that the cold front moving into the US Northwest may not be as severe as predicted.

Sam Fletcher
Senior Writer

HOUSTON, Dec. 8 -- Crude prices dropped Dec. 7 on news of a build in US oil inventories and indications that the cold front moving into the US Northwest may not be as severe as predicted.

The Energy Information Administration reported an increase in commercial US crude stocks during the week ended Dec. 2 of 2.7 million bbl to 320.3 million bbl, well above the average range for this time of year. US gasoline and distillate fuel inventories also escalated by 2.7 million bbl each to totals, respectively, of 202.6 million and 130.6 million bbl. Supplies of both heating oil and diesel increased.

Imports of crude into the US increased by 886,000 b/d to 10.6 million b/d during the same week. Input of crude into US refineries gained by 259,000 b/d to 15.4 million b/d, with refineries operating at 90.6% of capacity. This marked the first week that US refinery utilization has topped 90% since the week ended Sept. 16, just a day before Hurricane Rita made landfall on the upper Texas coast.

Three Gulf Coast refineries with capacity totaling 804,000 b/d remain shut down. Two others are operating at reduced rates.

Energy prices
The January contract for benchmark US light, sweet crudes tumbled by 73¢ to $59.21/bbl on the New York Mercantile Exchange, while the February position retreated by 67¢ to $60.18/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., lost 73¢ to $59.22/bbl. Heating oil for January delivery lost 3.54¢ to $1.74/gal. Gasoline for the same month dropped 1.59¢ to $1.57/gal. However, the January natural gas contract jumped by 21.1¢ to $13.70/MMbtu.

In London, the January North Sea Brent crude contract lost 63¢ to $56.98/bbl. Gas oil for December was down by $3.50 to $501.75/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes inched up by 3¢ to $52.88/bbl on Dec. 7.

Contact Sam Fletcher at [email protected].