Sam Fletcher
Senior Writer
HOUSTON, Nov. 1 -- After bottoming out at $57.05/bbl in interday trading Oct. 31, crude futures prices rose modestly in a late technical rally that forced many traders to cover lower-priced sales positions.
The expiring November heating oil contract hit a 15-month low of $1.57/gal in interday trading on the New York market, despite expectations of a draw on US inventories and reports of a natural gas pipeline leak in the Gulf of Mexico.
Meanwhile, analysts in the Houston office of Raymond James & Associate Inc. said markets are waiting to see how close members of the Organization of Petroleum Exporting Countries, excluding Iraq, will come to their proposal to cut crude production by 1.2 million b/d to 26.3 million b/d, effective Nov. 1.
The US Energy Information Administration reported Nov. 1 that commercial inventories of benchmark US light, sweet crudes increased by 2 million bbl to 334.3 million bbl in the week ended Oct. 27, following an unexpected drop of 3.3 million bbl the previous week when the 3-day closure of the Louisiana Offshore Oil Port cut US crude imports by a whopping 936,000 b/d to 9.5 million b/d.
EIA said gasoline stocks fell 2.8 million bbl to 204.6 million bbl last week. Distillate fuel inventories dropped 2.7 million bbl to 141.3 million bbl, with a 3.2 million bbl increase in ultralow-sulfur diesel fuel offset by a 4.4 million bbl drop in conventional diesel and a 1.5 million bbl decline in heating oil.
Imports of crude into the US increased by 599,000 b/d to 10.1 million b/d. Input of crude into US refineries increased by 406,000 b/d to 15.3 million b/d, with units operating at 88.9% of capacity. Gasoline production increased to 8.8 million b/d, and distillate fuel production was up to 4.2 million b/d.
Energy prices
The December contract for benchmark US crudes closed Oct. 31 at $58.73/bbl, up 37¢ on the New York Mercantile Exchange. The January contract also increased by 37¢, to $60.61/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., lost 63¢ to $58.74/bbl. Unleaded gasoline for November delivery inched up by 0.91¢ to $1.47/gal on NYMEX. Heating oil for the same month closed at $1.59/gal, down 1.46¢ for the day. Cooler-than-normal weather is predicted for the US Northeast, the world's biggest heating oil market, over the next 90 days.
The December natural gas contract gained 11.8¢ to $7.53/MMbtu on NYMEX. On the US spot market, natural gas at Henry Hub, La., lost 30¢ to $6.70/MMbtu.
In London, the December IPE contract for North Sea Brent crude increased 35¢ to $59.03/bbl. However, the November gas oil contract dropped $7.50 to $516.25/tonne.
OPEC's Vienna headquarters was closed for a local holiday Nov. 1, so no price update was available for the OPEC basket of 11 benchmark crudes.
Contact Sam Fletcher at [email protected].
