Sam Fletcher
Senior Writer
HOUSTON, Nov. 16 -- Energy prices rebounded Nov. 15 on the bullish combination of reduced US inventories of petroleum products and forecasts of normal to below-normal autumn temperatures across most of the nation.
The Energy Information Administration said commercial inventories of US crudes rose by 1.3 million bbl to 336 million bbl during the week ended Nov. 10. US gasoline stocks, however, fell 3.7 million bbl to 200.3 million bbl during the same period. Distillate fuel inventories dropped 3.6 million bbl to 135 million bbl, with a slight increase in heating oil buried by a significant decline in diesel fuel (OGJ Online, Nov. 15, 2006).
"Distillates (which include diesel fuels and heating oil) are in high demand during the winter months and have seen inventories drop for the past 2 months," said analysts in the Houston office of Raymond James & Associates Inc.
"The administration reported a large decline in total refined product inventories, driven by strong consumption and reduced supplies. Over the past 4 weeks, total refined product demand has been, on average, 4.5% above comparable year-ago levels. Total refined product inventories, adjusted for demand, are now only 1% above the historical 3-year average," said Jacques Rousseau, senior energy analyst at Friedman, Billings, Ramsey Group Inc., Arlington, Va.
"US inventories have been falling like a stone relative to their normal patterns," said Paul Horsnell at Barclays Capital Inc., London. "The latest US data have continued the very strong pattern of previous weeks, producing the fastest rate of decline relative to normal patterns in any 5-week period that we can find," Horsnell said. "US oil product inventories, (excluding the 'other oils' category, which is estimated rather than observed), now stand 17.3 million bbl higher than their 5-year average. Five weeks ago, they stood 56.8 million bbl higher, i.e., they have fallen by 39.5 million bbl relative to the 5-year average, which is a rate of descent of more than 1.3 million b/d. In terms of forward cover, product inventories are now lower than their 5-year average."
Energy prices
The December contract for benchmark US light, sweet crudes traded as high as $59.40/bbl Nov. 15 on the New York Mercantile Exchange before closing at $58.76/bbl, up 48¢ for the day. The January contract climbed by 54¢ to $60.72/bbl. That rally was reported to be continuing during early trading Nov. 16. On the US spot market on Nov. 15, West Texas Intermediate was up by 48¢ to $58.77/bbl. Unleaded gasoline jumped by 3.73¢ to $1.58/gal on NYMEX. Heating oil for the same month increased 2.92¢ to $1.69/gal.
The December natural gas contract traded at $7.90-8.21/MMbtu Nov. 15 on NYMEX before closing at $8.12, up by 14.3¢ for the day. On the US spot market, natural gas at Henry Hub, La., slipped by 1¢ to $7.47/MMbtu.
On Nov. 16, EIA reported the injection of 5 bcf into US underground storage during the week ended Nov. 10. That was at the low end of consensus among Wall Street analysts and compared with a withdrawal of 7 bcf the previous week and the injection of 51 bcf during the same period in 2005. US gas storage now stands at 3.45 tcf, up by 176 bcf from year-ago levels and 238 bcf above the 5-year average.
In London, the December IPE contract for North Sea Brent crude escalated by 62¢ to $59.46/bbl. The gas oil contract gained $5.25 to $534/tonne.
The average price for Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes increased by 14¢ to $55.33/bbl on Nov. 15
Contact Sam Fletcher at [email protected]
