Sam Fletcher
Senior Writer
HOUSTON, May 17 -- Front-month crude futures prices made small gains May 16 in the New York and London markets as inflation fears were relieved by US economic data showing producer prices, other than food and energy, increased less than expected in April.
Meanwhile, the "white noise" of geopolitical problems continued in the background of commodities trading. On May 17, Iranian President Mahmoud Ahmadinejad rejected a proposal by the UK, Germany, and France to offer a light-water reactor as part of a package deal to get Iran to freeze its uranium enrichment program. Commenting at a public function in Arak, site of a heavy-water nuclear reactor, he said the Europeans were offering "walnuts and chocolate for gold."
US inventories
The Energy Information Administration said May 17 that commercial US crude inventories dipped by 100,000 bbl to 346.9 million bbl in the week ended May 12. Gasoline stocks increased by 1.3 million bbl to 206.4 million bbl, still at the lower end of the average range for this time of year. Distillate fuel inventories also declined by 100,000 bbl in the same period, to 114.6 million bbl with a small decrease in diesel fuel overpowering a small increase in heating oil.
Imports of crude into the US increased by 376,000 b/d to 10.4 million b/d that week. Gasoline imports averaged 1.45 million b/d, "the third highest weekly average ever," said EIA officials. Input of crude into US refineries increased by 21,000 b/d to 15.3 million b/d. Refineries operated at 89.8% of capacity.
Energy prices
The June contract for benchmark US light, sweet crudes inched up by 12¢ to $69.53/bbl May 16 on the New York Mercantile Exchange, but the July contract lost 15¢ to $70.32/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by 12¢ to $69.54/bbl. Gasoline for June delivery dropped 2.79¢ to $2.03/gal on NYMEX. Heating oil for the same month rose 0.65¢ to $1.95/gal.
The June natural gas contract gained 12.9¢ to $6.25/MMbtu in "a little bit of a short-covering rally as traders continued to search for relevant fundamental news," said analysts at Enerfax Daily.
In London, the June IPE contract for North Sea Brent crude increased 67¢ to $70.34/bbl. The June gas oil contract gained $1.25 to $620.25/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes dropped 84¢ to $63.83/bbl on May 16.
Contact Sam Fletcher at [email protected].