MARKET WATCHReports force down energy prices

May 12, 2005
Energy prices fell May 11 after the Paris-based International Energy Agency concluded that China's demand for oil is falling despite the country's still rapid economic growth.

Sam Fletcher
Senior Writer

HOUSTON, May 12 -- Energy prices fell May 11 after the Paris-based International Energy Agency concluded that China's demand for oil is falling despite the country's still rapid economic growth.

The market also was impacted by a May 11 report by the Energy Information Administration that commercial US crude inventories rose by 2.7 million bbl to 329.7 million bbl in the week ended May 6, the highest level since the end of March 2002. Gasoline stocks increased by 200,000 bbl to 213.7 million bbl during that same period, while distillate fuel inventories rose by 1.7 million bbl to 104 million bbl.

US imports of crude declined by 267,000 b/d to 10 million b/d during that same period. Input of crude into US refineries was down by 26,000 b/d to 15.4 million b/d, with refineries operating at 91.8% of capacity. However, production of refined products increased slightly to 8.9million b/d for gasoline and 4.1 million b/d for distillate fuel.

Energy prices
The June contract for benchmark US sweet, light crudes tumbled by $1.62 to $50.45/bbl on the New York Mercantile Exchange, while the July contract lost $1.54 to $51.95/bbl. On the US spot market, West Texas Intermediate was down by $1.62 to $50.46/bbl. Heating oil for June delivery fell by 4.65¢ to $1.40/gal. Gasoline for the same month declined by 2.83¢ to $1.48/gal. The June natural gas contract slipped by 1.1¢ to $6.68/MMbtu.

In London, the June contract for North Sea Brent crude dropped $1.36 to $50.07/bbl.

Contact Sam Fletcher at [email protected]