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.

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 paulad@ogjonline.com.

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