Sam Fletcher
Senior Writer
HOUSTON, Mar. 7 -- Energy prices rebounded Mar. 6, regaining some of the losses over the two previous sessions, as global stock markets partially recovered from their weeklong declines.
"The bottoming of the stock markets was enough to support the energy complex despite intraday pressure from gasoline but left crude oil to trade in a very narrow range," said Olivier Jakob, managing director of Petromatrix GMBH, Zug, Switzerland. The front-month crude contract on the New York futures market "has been once more very well supported around the $60/bbl level, but as it stays in a narrow trading range the momentum indicators are weakening," Jakob said.
Analysts in the Houston office of Raymond James & Associates Inc. noted "a shift in sentiment on the US economy." They reported, "Henry Paulson, US Secretary of Treasury, has stated that global economic growth is strong, citing low inflation and a high degree of liquidity. On the natural gas side, we still believe that winter-ending storage will trend toward 1.3-1.4 tcf even with moderate temperatures in recent weeks."
US inventories
The Energy Information Administration said Mar. 7 that commercial US crude inventories fell by 4.8 million bbl to 324.2 million bbl in the week ended Mar. 2. Gasoline stocks dropped 3.8 million bbl to 216.4 million bbl in the same period. Distillate fuel inventories declined by 1.3 million bbl to 123.2 million bbl, with a drop in heating oil more than compensating an increase in diesel. Propane and propylene inventories dropped by 3.2 million bbl to 28.7 million bbl.
Imports of crude into the US fell by 650,000 b/d to less than 8.9 million b/d during that period, due in part to fog delays along the Houston Ship Channel. Yet the input of crude into US refineries increased by 141,000 b/d to nearly 14.8 million b/d, with units operating at 85.8% of capacity. Gasoline production declined slightly to 8.6 million b/d, while distillate production increased above 4 million b/d.
Energy prices
The April contract for benchmark US light, sweet crudes gained 62¢ to $60.69/bbl Mar. 6 on the New York Mercantile Exchange. The May contract ramped up by 76¢ to $62.06/bb. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 62¢ to $60.70/bbl. Heating oil for April delivery increased by 2.25¢ to $1.75/gal on NYMEX. The April contract for reformulated blend stock for oxygenate blending (RBOB) inched up by 0.86¢ to $1.85/gal.
The April natural gas contract gained 21.8¢ to $7.47/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., rose by 16.5¢ to $7.51/MMbtu.
In London, the April IPE contract for North Sea Brent crude escalated by 85¢ to $61.39/bbl. However, gas oil for March lost $1 to $532.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes dipped by 11¢ to $57.12/bbl on Mar. 6.
Contact Sam Fletcher at [email protected].
