Sam Fletcher
Senior Writer
HOUSTON, Feb. 27 -- Crude futures prices continued climbing to new intraday and closing highs Feb. 26 as the US dollar tumbled to a record low against the euro in currency markets.
US currency also lost ground against the yen, Swiss franc, and the British pound as US officials reported a continued slide in housing prices and consumer conference, compared with better-than-expected economic indicators in Germany. That seems to signal that a US recession may not negatively affect other economies.
Meanwhile, Chakib Khelil, president of the Organization of Petroleum Exporting Countries, told reporters that members of that group definitely will not opt for a production increase at their next meeting Mar. 5 in Vienna.
US inventories
On Feb. 27, the Energy Information Administration reported commercial US inventories of crude increased for the seventh consecutive week, up 3.2 million bbl to 308.5 million bbl during the week ended Feb. 22. That surpassed Wall Street expectations of a 2.4 million bbl build. Gasoline stocks jumped by 2.3 million bbl to 232.6 million bbl, vs. a market consensus of a 400,000 bbl increase. Distillate fuel inventories fell by 2.5 million bbl to 120 million bbl during the same period, surpassing expectations of a 2 million bbl decline. Propane and propylene inventories dropped 2.4 million bbl to 31.6 million bbl.
Imports of crude into the US declined by 144,000 b/d to 10 million b/d during that same period. Gasoline imports averaged 1.4 million b/d. "A surprising 500,000 b/d increase to gasoline imports (including blend stocks) resulted in a 2.3 million bbl rise to gasoline inventories, which are now 7% ahead of the 5-year average for this calendar week," said Jacques H. Rousseau, an analyst at Solely-Back Bay Research. However, the low gasoline arbitrage spread between the US East Coast and Europe likely will curtail that high level of US imports, he said. "In total, inventories of gasoline, distillate, and jet fuel were essentially unchanged from last week, and we anticipate seasonal inventory draw downs to resume next week," Rousseau said.
Input of crude into the US refining system increased by 160,000 b/d to 14.6 million b/d during the week with refineries operating at 84.7% capacity. However, gasoline production declined to 8.8 million b/d in that period, and distillate fuel production fell to 3.9 million b/d, EIA reported.
Energy prices
The April contract for benchmark US light, sweet crudes hit another intraday trading high of $101.43/bbl Feb. 26 before closing at a record $100.88/bbl, up $1.65/bbl for the day on the New York Mercantile Exchange. The May contract gained $1.69 to $100.57/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up $1.48 to $100.89/bbl. Heating oil for March delivery advanced by 2.97¢ to $2.82/gal on NYMEX. The March contract for reformulated blend stock for oxygenate blending (RBOB) inched up by 0.86¢ to $2.55/gal.
The March natural gas contract climbed by 2¢ to $9.21/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., gained 4¢ to $9.26/MMbtu.
In London, the April IPE contract for North Sea Brent crude increased $1.78 to $99.47/bbl. The March gas oil contract, however, lost 75¢ to $898.75/tonne.
The average price for OPEC's basket of 12 reference crudes gained 46¢ to $94.09/bbl Feb. 26.
Contact Sam Fletcher at [email protected].
