Sam Fletcher
Senior Writer
HOUSTON, June 16 -- Crude prices rebounded June 15, making up much of the previous session's loses, as the Organization of Petroleum Exporting Countries announced a 500,000 b/d hike in its production quota effective July 1 that would match its present production levels of 28 million b/d without adding any new supply.
The July contract for benchmark US light, sweet crude jumped as high as $56.75/bbl after OPEC announced its quota increase before closing at $55.57/bbl, up 57¢ for the day on the New York Mercantile Exchange. The August contract gained 44¢ to $56.41/bbl on NYMEX. On the US spot market, West Texas Intermediate at Cushing, Okla., increased by 56¢ to $55.57/bbl.
At their June 15 meeting in Vienna, OPEC ministers authorized Conference President Ahmad Fahad Al-Ahmad Al-Sabah to boost the production quota by another 500,000 b/d, after consulting other heads of OPEC delegations, if crude prices do not fall prior to the group's next meeting on Sept. 19.
Other energy markets
Gasoline for July delivery escalated by 2.16¢ to $1.56/gal on NYMEX. However, heating oil for the same month dropped 1.75¢ to $1.62/gal after the Energy Information Administration reported June 15 that US distillate fuel stocks rose for the fifth consecutive week, up by 2.5 million bbl to 110.2 million bbl during the week ended June 10 (OGJ Online, June 15, 2005). But crude and gasoline inventories declined for the second straight week, with crude down by 1.8 million bbl to 329 million bbl and gasoline down by 900,000 bbl to 215.7 million bbl in that same period.
Imports of crude into the US increased by 397,000 b/d to more than 10.6 million b/d last week. Input of crude into US refineries increased by 281,000 b/d to more than 16.3 million b/d, with refineries operating at 96.7% of capacity. However, gasoline production declined to nearly 9 million b/d in that period while production of distillate fuel increased to 4.4 million b/d, "the largest weekly average ever," said EIA officials.
The July natural gas contract shot up by 21.3¢ to $7.44/MMbtu June 15 on NYMEX. Natural gas futures prices rose through most of that session on "expectations that a second wave of above-normal [US] temperatures may increase demand from [electricity] generators as the peak period for air conditioning approaches," said analysts at Enerfax Daily. There are still "fears of more severe price spikes," they said.
EIA reported June 16 that 73 bcf of natural gas was injected into US underground storage for the week ended June 10. That was below the expectations of Wall Street analyts and down from injections of 112 bcf the previous week and 94 bcf during the same period a year ago. US gas storage now exceeds 1.96 tcf, up by 216 bcf from year-ago levels and 294 bcf above the 5-year average.
In London, the July contract for North Sea Brent crude increased by 77¢ to $54.50/bbl on the International Petroleum Exchange.
The average price for OPEC's basket of seven benchmark crudes climbed by 21¢ to $52.26/bbl on June 15. A new reference basket of 11 heavier, sourer benchmark crudes is to be used effective June 16.
Contact Sam Fletcher at [email protected]
