Sam Fletcher
Senior Writer
HOUSTON, June 6 -- On June 5 traders shrugged off the storm threat to Middle East crude supplies as Cyclone Gonu approached Oman and instead took profits from the recent rally in crude prices.
By June 6, however, Gonu weakened to a tropical storm. Nevertheless, North Sea Brent crude hit a 2-week high of $71/bbl in early trading. "Gonu has not only shut down Oman's 650,000 b/d in crude exports for a second day, but has made the Strait of Hormuz unsafe for navigation as it heads northward," said analysts at the Houston office of Raymond James & Associates Inc. Some 7,000 people were evacuated from coastal areas of Oman ahead of the storm.
US inventories
The US Energy Information Administration said June 6 that commercial US inventories of crude inched up by just 100,000 bbl to 342.3 million bbl in the week ended June 1. Gasoline stocks climbed by 3.5 million bbl to 201.5 million bbl but remained well below the average range. Distillate fuel inventories gained 1.9 million bbl to 122.3 million bbl; diesel fuel supplies increased while heating oil inventories were relatively unchanged. Propane and propylene inventories rose by 1.6 million bbl to 36.7 million bbl.
Imports of crude into the US increased by 222,000 b/d to 10.2 million b/d during the week. Input of crude into US refineries declined by 235,000 b/d to 15.4 million b/d with refineries operating at 89.6% of capacity.
Energy prices
The July contract for benchmark US light, sweet crudes dropped 60¢ to $65.61/bbl while the August contract lost 55¢ to $66.74/bbl on the New York Mercantile Exchange. On the US spot market, West Texas Intermediate at Cushing, Okla., was down 60¢ to $65.62/bbl. Heating oil for July delivery slipped by 0.02¢ but its closing was virtually unchanged at $1.96/gal on NYMEX. The July contract for reformulated blend stock for oxygenate blending (RBOB) retreated by 3.07¢ to $2.21/gal.
The July natural gas contract lost 12.7¢ to $8.06/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., increased by 3.5¢ to $7.82/MMbtu.
In London, the July IPE contract for North Sea Brent crude gained 5¢ to $70.45/bbl. The June gas oil contract dipped by 25¢ to $612/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes gained 55¢ to $66.18/bbl on June 5.
Contact Sam Fletcher at [email protected].