MARKET WATCH: Energy prices rebound in uncertain market

Crude futures prices rebounded Nov. 14, recouping much of the losses from two previous trading sessions, as an uncertain market refocused on forecasts of a fourth consecutive weekly counter-seasonal draw of US oil inventories.

Sam Fletcher
Senior Writer

HOUSTON, Nov. 15 -- Crude futures prices rebounded Nov. 14, recouping much of the losses from two previous trading sessions, as an uncertain market refocused on forecasts of a fourth consecutive weekly counter-seasonal draw of US oil inventories.

However, the Energy Information Administration said Nov. 15 commercial US crude inventories jumped by 2.8 million bbl to 314.7 million bbl in the week ended Nov. 9. The consensus of Wall Street analysts was for a decline of 400,000 bbl. US gasoline stocks increased by 700,000/bbl to 195 million bbl vs. an expected drop of 200,000 bbl. Distillate fuel inventories fell 2 million bbl to 133.4 million bbl during the same period, instead of the expected decline of 100,000 bbl. Propane and propylene inventories increased 100,000 bbl to 61.6 million bbl that week.

Imports of crude into the US increased by 831,000 b/d to 10.5 million b/d in the same week. Gasoline imports exceeded 1 million b/d, while distillate fuel imports averaged 210,000 b/d. The input of crude into the US refining system increased 164,000 b/d, however, to 15 million b/d with units operating at 87.7% of capacity. Gasoline production was relatively unchanged at 8.9 million b/d, and distillate fuel production increased to 4.2 million b/d.

With US crude inventory levels already at 2-year lows, an additional inventory decline would have sparked a bullish response, said analysts in the Houston office of Raymond James & Associates Inc.

Energy prices
The December contract for benchmark US sweet, light crudes jumped $2.92 to $94.09/bbl Nov. 14 on the New York Mercantile Exchange. The January contract escalated $2.63 to $92.83/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up $2.92 to $94.10/bbl. Heating oil for December delivery rose 7.13¢ to $2.57/gal on NYMEX. The December contract for reformulated blend stock for oxygenate blending (RBOB) increased 5.37¢ to $2.37/gal.

The December natural gas contract fell 11.4¢ to $7.84/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., increased 15¢ to $7.30/MMbtu. EIA reported the withdrawal of 9 bcf of gas from US underground storage during the week ended Nov. 9. That was at the high end of consensus among Wall Street analysts and compared with injections of 36 bcf the prior week and 5 bcf during the same period last year. US gas storage now tops 3.5 tcf, up 87 bcf from year-ago levels and 273 bcf above the 5-year average.

In London, the December IPE contract for North Sea Brent crude gained $2.53 to $91.36/bbl. Gas oil for December advanced $16.25 to $807.50/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes dropped 27¢ to $86.57/bbl on Nov. 14.

Contact Sam Fletcher at samf@ogjonline.com.

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