MARKET WATCHOil prices climb on US inventory reports of lower crude stocks

By OGJ editors
HOUSTON, Aug. 21 -- Oil prices climbed in New York and London markets Wednesday upon the release of an inventory report showing a US decline in crude and gasoline stocks.

The US Energy Information Administration estimated that US crude stocks fell by 1.6 million bbl to 278.8 million bbl. Later, the American Petroleum Institute said US crude stocks were lower by 2.034 million bbl to 279.3 million bbl, down 7.6% from the same time a year ago.

EIA said gasoline stocks were down by 1.2 million bbl to 196.9 million bbl—the lowest level in 9 months.

Energy prices
The contract for benchmark US light, sweet crudes for September delivery rose 25¢ to $30.95/bbl Wednesday on the New York Mercantile Exchange. The October position closed at $31.04/bbl, up 34¢ for the day.

Heating oil for September delivery on NYMEX jumped by 1.06¢ to 80.24¢/gal Wednesday. Unleaded gasoline for the same month gained 1.59¢ to $1/gal.

Meanwhile, the September natural gas contract gained 15.5¢ to $5.12/Mcf on NYMEX.

The climb in gas prices was "driven by an early rally in crude oil and a firm cash market as hot midweek weather settled into the Northeast and Midwest," said analysts Thursday at Enerfax Daily.

In London, the October contract for North Sea Brent oil rose 37¢ to $28.84/bbl Wednesday on the International Petroleum Exchange. The September natural gas contract rose by 1¢ to the equivalent of $2.39/Mcf on IPE.

The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes climbed 8¢ to $28.02/bbl Wednesday. The price had been above the group's target of $22-28/bbl for 12 days until Tuesday when it closed at $27.94/bbl.

OPEC ministers are slated to meet again Sept. 24 to discuss their production quota, which they left unchanged at 25.4 million b/d during a July 31 meeting.