HOUSTON, Jan. 20 -- Futures prices for crude and petroleum products fell Jan. 19 on the New York Mercantile Exchange in anticipation of a bearish report on US inventories to be issued after the close of trading.
Squeezed by the Jan. 17 US holiday and by the Jan. 20 inauguration of President George W. Bush, the US Energy Information Administration issued its weekly inventory report late in the afternoon of Jan. 19 instead of the usual morning release. It said commercial US inventories of crude jumped by 3.4 million bbl to 292.2 million bbl during the week ended Jan. 14, while distillate stocks were up by 800,000 bbl to 123.8 million bbl as an increase in diesel fuel offset a slight decline in heating oil. US stocks of gasoline rose by 1.7 million bbl to 217 million bbl during the same period.
US imports of crude increased by 147,000 b/d to more than 10.1 million b/d in the latest reported period. "Imports from Venezuela were relatively high," EIA said. However, crude input into US refineries declined by 395,000 b/d to 15.2 million b/d during the same period, with refineries operating at 91.5% of capacity. Distillate fuel production dropped from its record level during the previous week, and gasoline production also declined, said EIA.
US "refinery runs of crude have now fallen significantly," down to "the lowest level since late October, as the start of maintenance and the generally lower level of margins has begun to bite," said Paul Horsnell of Barclays Capital Inc., London.
"Lower runs were combined with higher imports, which leapt by 670,000 b/d on the Gulf Coast, leading inventories to increase by 3.4 million bbl for the US as a whole and by 4.4 million bbl in the key combined Midwest, Gulf Coast, and East Coast area," he said. "Most of the fall in refinery output was distillates, leaving gasoline output at a high level and leading to the continuation of the significant build in US gasoline inventories. That build may look alarming at first sight, but there are still some reasons not to overdo the bearishness yet."
The February contract for benchmark US sweet, light crudes dropped by 83¢ to $47.55/bbl Jan. 19 on NYMEX, while the March contract fell 62¢ to $47.86/bbl.
On the US spot market, West Texas Intermediate lost 83¢ to $47.56/bbl. Heating oil for February delivery dipped by 0.12¢ to $1.3426/gal on NYMEX. Gasoline for the same month was down by 0.13¢ to $1.2632/gal.
However, the February natural gas contract rebounded by 15.6¢ to $6.29/MMbtu, "buoyed by the cold Northeast and Midwest weather this week, but more moderate forecasts for next week tempered the gains," said analysts at Enerfax Daily.
In London, the March contract for North Sea Brent crude lost 68¢ to $44.71/bbl on the International Petroleum Exchange.
The average price of the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes declined by 45¢ to $41.52/bbl on Jan. 19.
Contact Sam Fletcher at [email protected]