MARKET WATCHUS crude oil inventories have neutral effect on crude oil prices

Crude oil future prices climbed again Wednesday on the New York Stock Exchange, mainly still in reaction to the Nov. 1 output cut by the Organization of Petroleum Exporting Countries.

Oct. 2, 2003

3 min read

By OGJ editors
HOUSTON, Oct. 2 -- Crude oil future prices climbed again Wednesday on the New York Stock Exchange, mainly still in reaction to the Nov. 1 output cut by the Organization of Petroleum Exporting Countries.

Traders said US inventory reports were generally neutral for crude oil. The US Energy Information Administration estimated the nation's crude stocks remained unchanged at 280.8 million bbl for the week ended Sept. 26, compared with the previous week. The American Petroleum Institute reported a decline of 921,000 bbl to 281.987 million bbl.

The EIA said gasoline stocks grew by 2.4 million bbl to 199.2 million bbl. Distillate stocks, including heating oil and diesel, grew by 100,000 bbl to 131.3 million bbl.

Steven Pfeifer, analyst with Merrill Lynch Global Securities Resource & Economics Group, New York, said the inventory numbers were less interesting than comments by Venezuela President Hugo Chavez about the need for OPEC to raise its targeted price band from $22-28/bb/ to $25-32/bbl.

"Officials from OPEC denied any such talks were under way—indeed we neither heard of nor participated in any such discussions while in Vienna last week—and would note that Chavez's remarks spoke of the crunch his government faces for financial capital more than anything else, in our opinion," Pfeifer said.

Energy prices
The November contract for benchmark US light, sweet crudes rose by 19¢ to $29.39/bbl Wednesday on NYMEX. The December contract for benchmark US oil climbed by 25¢ to $29.17/bbl.

Unleaded gasoline for October delivery climbed by 0.14¢ to 80.51¢/gal Wednesday on NYMEX.

Heating oil for the same month climbed by 1.10¢ to 79.85¢/gal. The increased heating oil prices stemmed from forecasts of colder-than-normal weather during the next couple of weeks across parts of the US.

The October natural gas contract dropped 15.3¢ to $4.68/Mcf Wednesday on NYMEX. On Thursday, Enerfax Daily analysts said the natural gas prices were "under minded by a sinking cash market in the face of moderating weather forecasts for next week despite the season's first bout of cold this week."

The EIA reported Thursday that working gas in storage was 2.88 tcf as of Sept. 26. That represented a net increase of 100 bcf from the previous week. Stocks were 250 bcf less than last year for the same period and 55 bcf below the 5-year average of 2.8 tcf.

In London, the November contract for North Sea Brent oil climbed 27¢ to $27.88/bbl Wednesday on the International Petroleum Exchange. The November natural gas contract rose Tuesday on IPE by 2¢ to the equivalent of $4.12/Mcf.

The average price for OPEC's basket of seven benchmark crudes increased by 26¢ to $27.08/bbl Wednesday.