MARKET WATCH: NYMEX oil price drops more than $1/bbl on inventory gain

The light, sweet crude oil price for October delivery dropped by more than $1 to settle under $47/bbl on the New York market Aug. 24 after the weekly US oil and product inventory report showed crude oil supplies rose 2.5 million bbl.

The US Energy Information Administration’s estimate of 523.6 million bbl total in crude supplies excluded oil stored in the Strategic Petroleum Reserve (OGJ Online, Aug. 24, 2016).

Regarding weekly US oil production, EIA reported 8.548 million b/d for the week ended Aug. 19, down 49,000 b/d from the previous week. Lower 48 production was down by a total 55,000 b/d, but that was partly offset by a gain of 6,000 b/d in Alaska production, the Petroleum Status Report showed.

Natural gas in underground storage across the Lower 48 was estimated at 3.35 tcf as of Aug. 19, marking a net increase of 11 bcf from the previous week. Stocks were 275 bcf higher than last year at this time, EIA said in its Gas Storage Report.

Separately, China’s National Bureau of Statistics said that country’s net crude oil imports fell by more than 2% in July from June. The July figure was 7.29 million b/d. Analysts attributed this to a slowing Chinese economy.

US gasoline futures prices rose slightly Aug. 24 on reports of a tropical wave in the Atlantic. The price for reformulated gasoline stock for oxygenates blending for September gained 1¢ to a rounded $1.51/gal.

Forecasters say the system could develop into a storm that might enter the Gulf of Mexico, threatening refineries. Invest 99L was forecast to become a depression or Tropical Storm Hermine, possibly intensifying into a hurricane.

The system was likely to reach south Florida by Aug. 28, forecasters said. The system’s path after that remained uncertain.

Energy prices

The NYMEX crude oil contract for October fell $1.33 to close at $46.77/bbl on Aug. 24. The October contract declined $1.27 to close at $47.48/bbl.

The natural gas contract for September climbed 3.5¢ to a rounded $2.80/MMbtu. On the spot market, the Henry Hub gas price gained 6¢ to $2.77/MMbtu.

Heating oil for September edged down less than a penny to a rounded $1.50/gal.

The Brent crude contract for October on London’s ICE fell 91¢ to settle at $49.05/bbl. The contract for November was down 97¢ to $49.35/bbl. The September gas oil contract settled at $432/tonne on Aug. 24, down $8.25.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $45.25/bbl on Aug. 24, down 9¢.

Contact Paula Dittrick at paulad@ogjonline.com.