Sam Fletcher
Senior Writer
HOUSTON, Apr. 11 -- Just a day after the biggest price drop in 3 months, a rally in gasoline and heating oil boosted crude futures prices Apr. 10 for the first time in five sessions on the New York market.
The front-month crude contract's $2.77 fall to $61.51/bbl on Apr. 9 "was due to heavy trading and not to light holiday action," said Olivier Jakob, managing director of Petromatrix GMBH, Zug, Switzerland. Trading volume for US crude on the New York Mercantile Exchange was "the highest in the last 7 days and the second highest in the last 19 days," he said.
"Due to outages, refiners are struggling to produce enough fuel, of the right quantity and type, in advance of the summer driving season," said analysts in the Houston office of Raymond James & Associates Inc. "Refinery shutdowns have led to a build-up in crude oil reserves and depressed prices compared to Brent Sea crude prices on the London Stock Exchange. Iran remains a catalyst for high oil prices, however. The country asserts it is enriching uranium on an industrial scale in defiance of global sanctions."
US inventories
On Apr. 11, the Energy Information Administration reported commercial US crude inventories increased by 700,000 bbl to 333.4 million bbl during the week ended Apr. 6, well below the jump that some analysts had expected in the face of recent refining outages.
Moreover, with the summer driving season fast approaching, gasoline stocks fell 5.5 million barrels to a below-average level of 333.4 million bbl. Distillate fuel inventories inched up just 100,000 bbl to 118.1 million bbl, with a modest gain in diesel offsetting a drop in heating oil. Propane and propylene inventories rose 700,000 bbl to 25.8 million bbl in the same week.
Imports of crude into the US fell by 441,000 b/d to 9.8 million b/d during that period. However, the input of crude into US refineries increased by 231,000 b/d to 15.1 million b/d, with units operating at 88.4% of capacity. Gasoline production declined to 8.5 million b/d while distillate fuel production increased to 4.2 million b/d.
Energy prices
The May contract for benchmark US light, sweet crudes gained 38¢ to $61.89/bbl Apr. 10 on NYMEX. The June contract escalated by 57¢ to $64.88/bbl. On the US spot market, West Texas Intermediate was up 38¢ to $61.90/bbl. Heating oil for May delivery surged by 4.04¢ to $1.86/gal on NYMEX. The May contract for reformulated blend stock for oxygenate blending (RBOB) increased 2.84¢ to $2.12/gal.
The May natural gas contract jumped by 32.3¢ to $7.87/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., gained 7¢ to $7.73/MMbtu. Colder-than-normal weather over the Easter weekend and in forecasts for the Northeast and Rockies helped propel gas prices. "Activity was up as traders covered short positions and pushed the price of gas up to close almost 4% higher," said Raymond James analysts
In London, the May IPE contract for North Sea Brent crude climbed 83¢ to $67.42/bbl. However, gas oil for April lost $5.75 to $582.25/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes lost 89¢ to $62.66/bbl on Apr. 10.
Contact Sam Fletcher at [email protected].
