By OGJ editors
HOUSTON, Apr. 6 -- Crude oil futures prices in New York reached above $67/bbl Apr. 5 after the US Energy Information Administration reported that gasoline inventories fell by 4.4 million bbl for the week ended Mar. 31.
It was the fourth consecutive report showing a larger-than-expected draw on refined product inventories, and the largest single-week drop since September 2005, said Jacques Rousseau, an analyst with Friedman Billings Ramsey Group Inc. of Arlington, Va.
"We expect inventories to continue declining over the coming weeks as supply-side constraints extend into April," Rousseau said. The constraints involve deferred maintenance operations and the methyl tertiary butyl ether phaseout.
EIA said gasoline stocks fell to 211.8 million bbl as of Mar. 31 from 216.2 million bbl on Mar. 24. Distillate inventories declined by 2.6 million bbl to 121.6 million bbl. Crude oil inventories rose by 2.1 million bbl to 342.8 million bbl.
Analysts blamed the drop in gasoline inventories on slower-than-expected refinery operations. EIA said refineries operated at 85.9% of capacity during the week ended Mar. 31, down from 87% for the previous week.
Refiners are undergoing seasonal maintenance, and some have yet to recover from last year's hurricane damage.
Organization of Petroleum Exporting Countries Pres. Edmund Baukoru, also Nigeria's oil minister, said refining bottlenecks could result in tight gasoline supplies as the peak US driving season nears.
"OPEC can supply more if more OPEC oil is called for," he told reporters during an energy conference in Algiers. "But if the downstream cannot process what we place on the market, it is useless to ask OPEC to produce more."
Energy prices
The NYMEX contract for benchmark US light, sweet crudes for May delivery climbed 84¢ at $67.07/bbl Apr. 5. The June contract rose by 70¢ to $68.36/bbl. On the US spot market, West Texas Intermediate gained 84¢ to $67.08/bbl.
Natural gas futures for May delivery on NYMEX rose $0.004 Apr.5 to settle at $7.069/MMbtu "as the market was buoyed by rising crude oil and gasoline prices after the EIA reported gasoline supplies fell again ahead of the coming summer demand," Enerfax Daily said.
Gasoline for May delivery on the New York Mercantile Exchange escalated by 5.16¢ to $1.9471/gal on Apr. 5. Heating oil for May delivery gained $0.013 to $1.8688/gal.
In London, the May IPE contract for North Sea Brent crude rose 71¢ to $67.10/bbl. Gas oil for April was up $6.00 to $584.25/tonne.
The average price for OPEC's basket of 11 benchmark crudes increased by 7¢ Apr. 5 to reach $61.08/bbl.
