Sam Fletcher
Senior Writer
HOUSTON, Dec. 20 -- Energy prices rose Dec. 19, regaining some of the losses from the previous trading session, in expectation of reports that US crude inventories were down for the fourth consecutive week.
In fact, the Energy Information Administration reported Dec. 20 a larger than expected plunge in commercial US crude stocks, down by 6.3 million bbl to 329.1 million bbl in the week ended Dec. 15. That greatly surpassed the 1.7 million bbl draw that was the consensus of Wall Street analysts. Moreover, instead of the expected 100,000 bbl build, US gasoline inventories jumped by 1 million bbl to 200.9 million bbl in the same period. Distillate fuel stocks rose by 1.2 million bbl to 133.1 million bbl—vs. an expected draw of 800,000 bbl—with increases in both heating oil and diesel fuel.
Imports of crude into the US declined by 696,000 b/d to 8.9 million b/d during that week. Yet inputs of crude into US refineries increased by 232,000 b/d to 15.5 million b/d, with units working at 90.7% of capacity. Gasoline production increased to 9.3 million b/d and distillate fuel production was up to 4.2 million b/d during that period.
"Over the past 2 months, the US oil data have shown a consistent pattern of rapid tightening with the total inventory overhang having eroded dramatically and with the fall tilted toward gasoline stocks, which now exhibits a deficit of 6.2 million bbl relative to their 5-year average," said analysts at Barclay's Capital, the investment banking division of Barclays Bank PLC, London.
Recent delays in Gulf Coast lightering operations because of fog along the Houston Ship Channel are likely to produce distortions in the weekly oil data, analysts said. However, the resulting delays in getting crude into the refineries are more likely to show up in statistics for the week ending Dec. 22, they said.
"Overall, a continuation of the recent trend of counterseasonal tightening in gasoline would be the most bullish part of the data in our view. Indeed, gasoline stocks usually rise over the fourth quarter to reach some 210 million bbl at the end of December. With just three sets of releases left before yearend and gasoline inventories standing below 200 million bbl, stocks should build at a rate of more than 3 million bbl/week to finish the year at normal levels, which at this point seems unlikely," said Barclay's Capital analysts. "This suggests to us that despite the recent pick-up in gasoline cracks, further upside cannot be ruled out especially should today's data turn out positive once again."
Meanwhile, the US dollar fell to a four-session low against the euro on Dec. 19.
Energy prices
The expiring January contract for benchmark US light, sweet crudes bumped up by 94¢ to $63.15/bbl Dec. 19 on the New York Mercantile Exchange. The new front-month February contract gained 67¢ to $63.46/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by 94¢ to $63.16/bbl. Unleaded gasoline for January delivery escalated by 3.83¢ to $1.70/gal on NYMEX. However, heating oil for the same month declined by 0.2¢ to close practically unchanged at $1.72/gal.
The January natural gas contract inched up by 0.8¢ to $7.08/MMbtu on NYMEX. On the US spot market, natural gas at Henry Hub, La., lost 6.5¢ to $6.48/MMbtu.
In London, the February IPE contract for North Sea Brent crude increased by 68¢ to $62.81/bbl. However, the January gas oil contract lost $7 to $536.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes dropped 96¢ to $57.44/bbl on Dec. 19.
Contact Sam Fletcher at [email protected].
