MARKET WATCH: NYMEX crude oil settles above $51/bbl, Brent above $52/bbl
Light, sweet crude oil prices jumped by more than $1/bbl to settle above $51/bbl for both November and December on the New York market Oct. 19, marking the highest level for the front-month settlement since July 14, 2015.
The rally came after the Energy Information Administration reported US crude inventories declined more than analysts expected. Oil supply levels have fallen for 6 of the past 7 weeks.
Commercial crude oil inventories, excluding the Strategic Petroleum Reserve, dropped 5.2 million bbl for the week ended Oct. 14 compared with Oct. 7, said the Petroleum Status Report. EIA estimated the inventory at 468.7 million bbl total as of Oct. 14 (OGJ Online, Oct. 19, 2016).
Total petroleum inventories remain nearly 20% above the 5-year average.
“We would underscore that the seasonal norm is for a build of 1.8 million bbl, and therefore this week marks another counter-seasonal draw,” said Pavel Molchanov, an analyst with Raymond James & Associates in Houston. He referred to seasonal refinery maintenance.
EIA estimated US oil production for the week ended Oct. 14 at 8.464 million b/d, up 14,000 b/d from the previous week. Alaska’s share of the production was 489,000 b/d, up 8,000 b/d from a week earlier. Lower 48 production for the week ended Oct. 14 was 7.975 million b/d, up 6,000 b/d.
Energy prices
The November crude oil contract on the New York Mercantile Exchange gained $1.31 on Oct. 19 to close at $51.60/bbl. The December contract was up $1.20 to $51.82/bbl.
The natural gas contract for November plunged 9¢ to a rounded $3.17/MMbtu. On the spot market, the Henry Hub gas price dropped 8¢ to $3.14/MMbtu.
Heating oil for November rose nearly 2¢ to a rounded $1.59/gal. The price for reformulated gasoline stock for oxygenates blending for November rose nearly 1¢ to a rounded $1.51/gal.
The December Brent crude contract on London’s ICE gained 99¢ to settle at $52.67/bbl, and the January contract increased 97¢ to settle at $53.42/bbl. The November gas oil contract settled at $473.25/tonne, up $13.25.
The average price for OPEC’s basket of benchmark crudes on Oct.19 was $49.06/bbl, up 82¢.
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.