Sam Fletcher
Senior Writer
HOUSTON, June 9 -- Prices for crude and petroleum products continued to fall June 8 as futures traders shrugged off reported drops in US inventories of crude and gasoline to take profits from last week's rally.
The Energy Information Administration said June 8 that commercial US gasoline inventories dipped by 100,000 bbl to 216.6 million bbl during the week ended June 3, while crude stocks fell by 3 million bbl to 330.8 million bbl. Distillate fuel inventories showed the only increase, up by 1.3 million bbl—all in diesel fuel—to 107.7 million bbl.
However, the heating oil market was affected by a separate June 8 report from the American Petroleum Institute showing a 3.1 million bbl jump in US distillates that some analysts described as "implausibly large." The resulting sell off of heating oil led the New York commodities future market down, analysts said.
Meanwhile, Ahmad Fahad al-Sabah, conference president of the Organization of Petroleum Exporting Countries said members of that group are in nearly unanimous agreement to keep production at current levels. OPEC's current production quota, excluding Iraq, is 27.5 million b/d. But in a June 9 meeting with reporters in Brussels, Al-Sabah said the group is producing more than 30 million b/d, close to its estimated full production capacity.
Energy prices
The July contract for benchmark US sweet, light crudes closed at $52.54/bbl , down by $1.22 for the day, after earlier trading as high as $55/bbl June 8 on the New York Mercantile Exchange. The August contract lost $1.09 to $53.85/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by $1.22 to $52.55/bbl. Heating oil for July delivery plunged by 4.8¢ to $1.55/gal on NYMEX. Gasoline for the same month fell by 1.82¢ to $1.50/gal.
The July natural gas contract dropped 12.7¢ to $7/MMbtu on NYMEX, "yanked down by a slumping petroleum complex after gyrating in a 46¢ range," said analysts at Enerfax Daily. EIA reported June 9 that 112 bcf of natural gas was injected into US underground storage in the week ended June. 3. That's up from 86 bcf the previous week and 102 bcf during the same period a year ago. US gas storage now stands at 1.89 tcf, up by 239 bcf from a year ago and 317 bcf above the 5-year average.
In London, the July contract for North Sea Brent crude declined by $1.02 to $52.11/bbl on the International Petroleum Exchange.
The average price for OPEC's basket of seven benchmark crudes lost 53¢ to $50.21/bbl on June 8.
Contact Sam Fletcher at [email protected]
