MARKET WATCH: NYMEX crude oil price surge on US oil supply dip
Light, sweet crude oil contracts gained more than $2/bbl on the New York market Sept. 8 as did the Brent crude oil contracts on the London market after a massive drop was reported in US oil supplies.
The US Energy Information Administration reported a 14.5 million-bbl drop in oil supplies for the week ended Sept. 2. Crude oil prices on the New York market fell in early Sept. 9 trading.
The Petroleum Status Report showed a 30,000-b/d decline in US oil production for the week ended Sept. 2 to a total of 8.458 million b/d.
EIA said Alaska oil production fell 45,000 b/d for the week, but the Lower 48 production gained 15,000 b/d to help partially offset the total decline.
Regarding natural gas in underground storage across the Lower 48, EIA estimated levels at a rounded 3.44 tcf as of Sept. 2, up 36 bcf from the previous week.
The Gas Storage Report said the Sept. 2 level was 196 bcf higher than last year at this time and 306 bcf above the 5-year average of 3.13 tcf.
Raymond James & Associates analyst J. Marshall Adkins of Houston forecast the Dec. 31 US gas storage levels at close to 4 tcf.
“Next week could bring a meaningfully higher injection,” Adkins said. “Certain one-time items (tropical storm, holiday, weather, and lower LNG exports) could combine to bring a higher than recently seen injection.”
Energy prices
The October crude oil contract on the New York Mercantile Exchange surged up $2.12 on Sept. 8 to close at $47.62/bbl. The November contract climbed $2.11 to $48.26/bbl.
The natural gas contract for October rose 13¢ to at a rounded $2.81/MMbtu. On the spot market, the Henry Hub gas price was up 2¢ to $2.84/MMbtu.
Heating oil for October increased 5.6¢ to a rounded $1.48/gal. The price for reformulated gasoline stock for oxygenates blending gained 7¢ to a rounded $1.42/gal.
The November Brent crude contract on London’s ICE rose $2.01 to settle at $49.99/bbl and the December contract climbed $2.04 to settle at $50.43/bbl. The September gas oil contract settled at $427.75/tonne, up $17.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Sept. 8 was $44.61/bbl, up $1.43.
Contact Paula Dittrick at [email protected].
About the Author
Paula Dittrick
Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.