MARKET WATCH: Oil prices drop back below $50/bbl

Crude oil futures prices, after climbing above $50/bbl in earlier sessions, fell back below that mark in New York markets Jan. 6.

By OGJ editors
HOUSTON, Jan. 7 -- Crude oil futures prices, after climbing above $50/bbl in earlier sessions, fell back below that mark in New York markets Jan. 6.

"Having climbed over $50[/bbl], oil prices closed 0.5% lower at $48.58/bbl, as some dismal economic data fed through later during the day," said analysts with Barclays Capital.

"Meanwhile, evidence of further compliance from [Organization of Petroleum Exporting Countries] members continues to emerge as Kuwait has notified European and US refiners of cuts of 10% in supply," Barclays analysts said.

US inventories
The US Energy Information Administration said Jan. 7 commercial US inventories of crude rose by 6.7 million bbl to 325.4 million bbl during the week ended Jan. 2. Gasoline stocks, meanwhile, jumped by 3.3 million bbl to 211.4 million bbl during the same period. Distillate fuel inventories increased by 1.8 million bbl to 137.8 million bbl.

Imports of crude into the US increased 1.2 million b/d to 10.5 million b/d in that period. The input of crude into US refineries rose 332,000 b/d to 14.5 million b/d during the week ended Jan. 2 with plants working 84.6% of capacity.

Gasoline production rose last week to 9.1 million b/d and distillate fuel production increased to 4.6 million b/d.

EIA also reported the withdrawal of 147 bcf of natural gas from US underground storage in the week ended Dec. 19. That left little more than 3 tcf of gas in storage, 35 bcf less than in the same period a year ago but 99 bcf above the 5-year average.

Energy prices
The February futures contract for benchmark US light, sweet crudes lost 23¢ to $48.58/bbl on Jan. 6 on the New York Mercantile Exchange. The March contract climbed 44¢ to $53.13/bbl.

On the US spot market, West Texas Intermediate at Cushing, Okla., lost 23¢ to $48.58/bbl. The January contract for reformulated blend stock for oxygenate blending rose only slightly, up less than a penny to $1.1892/gal on NYMEX. Heating oil for the same month climbed 5¢ to $1.6263/gal.

The February natural gas contract lost 8.9¢ to $5.983/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., rose 26¢ to $6.095/MMbtu.

In London, the February IPE contract for North Sea Brent crude gained 91¢ to $50.53/bbl. Gas oil for January rose by $35.75 to $514.50/tonne.

The average price for OPEC's basket of 12 reference crudes rose $2.41 to $46.27/bbl on Jan. 6.

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