Sam Fletcher
Senior Writer
HOUSTON, June 22 -- After pushing to record highs for crude futures in the previous two trading sessions, energy prices pulled back June 21 amid speculation that the Norwegian government and oil workers were near settlement of a proposed strike that threatened to shut in 920,000 b/d of crude and 210 million cu m of natural gas production.
Ahmad Fahad Al-Ahmad Al-Sabah, conference president for the Organization of Petroleum Exporting Countries and also oil minister of Kuwait, earlier said he'd begin consulting other ministers on June 24 about raising OPEC's production ceiling by another 500,000 b/d to 28.5 million b/d if the recent run up of crude prices wasn't halted by then
Meanwhile, 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.
US imports of crude declined by 440,000 b/d to 10.2 million b/d during that period. Crude input into US refineries last week was down by 386,000 b/d to 16 million b/d with refineries operating at 94.8% of capacity, said EIA.
Energy prices
The July contract for benchmark US light, sweet crudes settled at $58.90/bbl June 21 on the New York Mercantile Exchange, down by 47¢ for the day after trading as high as $59.70/bbl in that session. The August contract lost 84¢ to $59.04/bbl. Other contracts through December declined in price but remained in contango, with each month's settlement price at a progressively higher level. Prices for November and December crudes remained above $60/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., plunged by $2.46 to $56.91/bbl.
Heating oil for July delivery fell by 3.21¢ to $1.63/gal on NYMEX. Gasoline for the same month was down by 1.82¢, also averaging $1.63/gal. The July natural gas contract plunged by 19.6¢ to $7.47/MMbtu, its second consecutive loss in as many sessions after rallying by nearly 26% over the previous 3 weeks as a result of some of the hottest June weather in years.
"A spell of cooler weather and a retreat from recent highs in the petroleum complex, as well as profit taking, eased the buying pressure" in the natural gas futures market, said analysts at Enerfax Daily. "Temperatures in New York and Chicago are mostly expected to average slightly above normal this week, with highs mostly forecast in the low to mid-80s," analysts said. "The latest National Weather Service forecast for next week calls for above normal temperatures for the eastern two-thirds of the nation, with seasonal or below-seasonal readings expected in the West and parts of Texas and Florida."
In London, the August contract for North Sea Brent crude fell by 82¢ to $57.50/bbl June 21 on the International Petroleum Exchange.
However, the average price for OPEC's new basket of 11 benchmark crudes continued to climb, up by 10¢ to $52.88/bbl.
Contact Sam Fletcher at [email protected]