Sam Fletcher
Senior Writer
HOUSTON, Sept. 27 -- Petroleum prices retreated slightly, with crude holding just above $61/bbl Sept. 26 as traders concentrated on US inventories instead of speculation that the Organization of Petroleum Exporting Countries may cut production.
Traders generally were anticipating a decline in crude inventories and a rise in distillate supplies. On Sept. 27, the Energy Information Administration reported commercial US inventories of crude dipped by 100,000 bbl to 324.8 million bbl during the week ended Sept. 22, with supplies still well above average for the time of year. Strong US production and high import levels pushed up gasoline stocks by 6.3 million bbl to 213.9 million bbl during the week. Distillate fuel inventories rose by 2.6 million bbl to 151.3 million bbl, with most of the increase—2.1 million bbl—in heating oil.
Imports of crude into the US jumped by 491,000 b/d to 11.1 million b/d, the third highest weekly average ever, said EIA officials. However, the input of crude into US refineries declined by 107,000 b/d to 15.8 million b/d with units operating at 92.4% of capacity. Gasoline production rose to 9.3 million b/d, while distillate fuel production decreased to 4.2 million b/d.
OPEC ministers have conferred about the recent sharp drop in world oil prices but have taken no action so far. Analysts speculate that OPEC might reduce production if oil futures prices drop below $60/bbl on the New York market for some period of time.
"Oil is holding steady as OPEC leaders hint at the need to steady the price of oil," said analysts in the Houston office of Raymond James & Associates Inc. "Russia and Iran signed a deal for Moscow to ship nuclear fuel for the planned opening of the Bushehr power plant in 1 year," they noted and asked, "Could this obviate Iran's need for enriching uranium and lead to more peaceful relations with the West?"
Energy prices
The November contract for benchmark US light, sweet crudes dropped 44¢—almost half of its gain from the previous session—to $61.01/bbl Sept. 26 on the New York Mercantile Exchange. The December contract lost 41¢ to $61.92/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by 44¢ to $61.02/bbl. Unleaded gasoline for October delivery dipped by 0.83¢ to $1.49/gal on NYMEX. However, heating oil for the same month inched up by 0.14¢ although its closing price was virtually unchanged at $1.66/gal. The October natural gas contract gained 5.1¢ to $4.53/MMbtu on NYMEX.
In London, the November IPE contract for North Sea Brent crude dropped 68¢ to $60.12/bbl. Gas oil for October escalated by $10 to $539.25/tonne.
The average price for OPEC's basket of 11 benchmark crudes was unchanged at $55.86/bbl on Sept. 29.
Contact Sam Fletcher at [email protected].
