By OGJ editors
HOUSTON, Jan. 8 -- Following a larger-than-expected build in petroleum inventories, crude prices took a tumble Jan. 7, dropping below $43/bbl.
Separately, a decision made by a member of the Organization of Petroleum Exporting Countries may affect upcoming markets.
Raymond James & Associates Inc. analysts reported, "Venezuela, which is historically known to comply only to a small degree with stated OPEC cuts, has begun reducing crude shipments to US refineries in Chalmette and Sweeney and warning clients to make provisions for reduced supply."
Overall, RJA analysts say, these cuts will impact about nine projects, including a joint venture with BP PLC.
Energy prices
The February futures contract for benchmark US light, sweet crudes plunged $5.95 to $42.63/bbl on Jan. 7 on on the New York Mercantile Exchange. The March contract also fell by almost as much, down $5.74 to $47.39/bbl.
On the US spot market, West Texas Intermediate at Cushing, Okla., was down $5.95 to $42.63/bbl. February heating oil declined 8.32¢ to $1.54/gal on NYMEX. The February contract for reformulated blend stock for oxygenate blending (RBOB) was down 11.28¢ to $1.076/gal.
Natural gas for the same month dropped 11.1¢ to $5.872/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 21¢ to $5.89/MMbtu.
The US Energy Information Administration reported the withdrawal of 47 bcf of natural gas from underground storage in the week ended Jan. 2, leaving 2.83 tcf in storage. That's 31 bcf more than a year ago and 87 bcf above the 5-year average.
In London, the February IPE contract for North Sea Brent crude slipped $4.67 to $45.86/bbl. January gas oil lost $14 to $500.50/tonne.
The average price for OPEC's basket of 12 reference crudes was off 52¢ to $45.75/bbl on Jan. 7.
