Sam Fletcher
Senior Writer
HOUSTON, Feb. -- The front-month oil futures price fell by more than $2/bbl Feb. 7 on the New York market as the US Energy Information Administration reduced its forecast of global oil demand to 85 million b/d during the first quarter of this year, down by 300,000 b/d.
EIA lowered its forecast of US oil demand for the same period by 220,000 b/d to 20.67 million b/d.
Traders anticipated that EIA also would report this week another build in US crude inventories. However, government officials said Feb. 8 that commercial US crude inventories dipped by 300,000 bbl to 320.7 million bbl during the week ended Feb. 3. Distillate fuel stocks fell by the same amount in the same period to 136 million bbl, with a large decline in heating oil overcoming an increase in diesel fuel. Gasoline inventories jumped by 4.3 million bbl to 223.3 million bbl.
US imports of crude increased by 264,000 b/d to 9.9 million b/d. But crude imports over the last 4 weeks have averaged 9.6 million b/d—down by 156,000 b/d from the comparable period in 2005, EIA reported.
The input of crude into US refineries declined by 203,000 b/d to 14.5 million b/d in the week ended Feb. 3. With some units down for routine maintenance, refineries operated at 85.8% of capacity during the week. Gasoline production declined while production of distillate fuel increased slightly, EIA said.
Energy prices
The March contract for benchmark US light, sweet crudes dropped $2.02 to $63.09/bbl Feb. 7 on the New York Mercantile Exchange. The April contract lost $1.94 to $64.14/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by $2.03 to $63.10/bbl. Heating oil for March delivery fell by 7.1¢ to $1.69/gal on NYMEX. Gasoline for the same month declined by 5.02¢ to $1.59/gal. The March natural gas contract retreated by 13.7¢ to $7.86/MMbtu on NYMEX, "following the entire crude oil complex as it tumbled lower," said analysts at Enerfax Daily.
In London, the March contract for North Sea Brent crude lost $1.77 to $61.56/bbl on the International Petroleum Exchange. Gas oil for February fell by $15 to $529.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes declined by 99¢ to $58.35/bbl on Feb. 7. So far this year, OPEC's basket price has averaged $58.29/bbl, up from an average price of $50.64/bbl in 2005.
Contact Sam Fletcher at [email protected].
