Sam Fletcher
Senior Writer
HOUSTON, Feb. 23 -- Even as Nigerian officials tried to negotiate the release of nine foreign oil workers held by rebels, energy prices fell Feb. 22 in expectation of another build in US inventories.
The US Energy Information Administration said Feb. 23 that commercial inventories of US crude increased by 1.1 million bbl to 326.7 million bbl during the week ended Feb. 17. US gasoline stocks inched up by 100,000 bbl to 225.6 million bbl, the highest level since June 4, 1999. Distillate fuel inventories dropped 1.3 million bbl to 135.6 million bbl in the same period as a decrease in diesel fuel more than compensated for a slight increase in heating oil.
US imports of crude were down by 305,000 b/d to 10 million b/d over the same period. Input of crude into US refineries declined by 48,000 b/d to 14.6 million b/d, with refineries operating at 86.6% of capacity. Gasoline production declined to 8.5 million b/d, while distillate fuel production increased slightly to 3.8 million b/d. That report was a day late this week because of the US Presidents Day holiday.
EIA subsequently reported the withdrawal of 123 bcf of natural gas from US underground storage in the week ended Feb. 17, compared with withdrawals of 102 bcf the previous week and 88 bcf during the same period last year. US gas storage now stands at 2.1 tcf, up by 370 bcf from a year ago and 694 bcf above the 5-year average.
Meanwhile, Royal Dutch Shell PLC shut in Nigerian production totaling 455,000 b/d following recent rebel attacks on oil facilities in the Niger Delta (OGJ Online, Feb. 21, 2006).
On Feb. 22, the US Minerals Management Service reported 90 platforms still idle in federal waters of the Gulf of Mexico because of damage inflicted by Hurricanes Katrina and Rita late last summer. MMS officials said 362,796 b/d, or 24.2% of daily crude production, and 1.5 bcfd, or 15% of daily gas production from the gulf are still shut in.
Cumulative production lost since Aug. 26 when Katrina was approaching the oil and gas production area of the gulf now totals 129.6 million bbl of crude and 652.6 bcf of gas. That's the equivalent to 23.7% of the crude and 17.9% of the natural gas produced annually from federal leases in gulf waters.
Energy prices
The new April front-month contract for benchmark US sweet, light crudes fell by $1.73 to $61.01/bbl Feb. 22 on the New York Mercantile Exchange. The May contract lost $1.48 to $62.25/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., plunged by $3.11 to $58.02/bbl. Heating oil for March delivery declined by 1.43¢ to $1.65/gal on NYMEX. Gasoline for the same month slipped by 0.12¢ to $1.47/gal. The March natural gas contract fell by 44.8¢ to $7.28/MMbtu. "Forecasters expect March through May to average cooler than normal in the northeastern states with warmer-than-normal temperatures elsewhere," said analysts at Enerfax Daily.
In London, the April IPE contract for North Sea Brent crude lost $1.16 to $60.44/bbl in electronic trading. The March gas oil contract was down by $11.25 to $521/tonne.
The average price of the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes lost 35¢ to $55.72/bbl on Feb. 22.
Contact Sam Fletcher at [email protected].
