By OGJ editors
HOUSTON, June 23 -- Energy prices continued to retreat June 22 as traders interpreted a build in US inventories of petroleum products as at least a temporary lull in demand.
However, Paul Horsnell, Barclays Capital Inc., London, pointed out, "This is June, and even with world upstream production running close to flat out, US inventories are simply keeping pace with a normal seasonal pattern, and imports are flat year-over-year. There has been no buffer built up over the course of the quarter. Indeed the buildup in inventories relative to their 5-year average stopped in February, since when it has been pretty much trendless."
The Energy Information Administration reported June 22 that commercial US crude inventories fell for the third consecutive week, down by 1.6 million bbl to 327.4 million bbl during the week ended June 17. Gasoline stocks inched up by 200,000 bbl to 215.9 million bbl, while distillate fuel inventories gained 1.3 million bbl to 111.5 million bbl during the same period, with heating oil gains outstripping declines in diesel fuel.
Energy prices
The new front-month August contract for benchmark US light, sweet crudes closed at $58.09/bbl, down 95¢ for the day after trading at $57.85-59.55/bbl June 22 on the New York Mercantile Exchange. The September contract lost 89¢ to $58.74/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., jumped by 94¢ to $57.85/bbl. Gasoline for July delivery dropped 1.49¢ to $1.61/gal on NYMEX. Heating oil for the same month slipped by 0.71¢ to $1.62/gal.
The July natural gas contract fell by 3.2¢ to $7.44/MMbtu on NYMEX, "falling for the third day in a row as a break in the heat and a retreat from recent [price] highs in the petroleum complex, as well as more profit taking, prompted the selling," said analysts at Enerfax Daily.
On June 23, EIA reported 75 bcf of natural gas injected into US underground storage during the week ended June 10. That was up from 73 bcf the previous week but down from 85 bcf during the same period last year. US gas storage now stands at 2.03 tcf after EIA revised down its estimated storage by 7 bcf to 1.96 tcf at the end of last week. Storage now is up by 198 bcf from year-ago levels and 271 bcf above the 5-year average.
In London, the August contract for North Sea Brent crude fell by 92¢ to $56.58/bbl on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' new basket of 11 benchmark crudes declined for the first time since it was activated June 16, down by 54¢ to $52.54/bbl.