MARKET WATCH: NYMEX crude oil falls on Cushing supply gain

The crude oil contract for November delivery fell 70¢ on the New York market Oct. 12 to settle at $50.60/bbl after the US Energy Information Administration reported oil levels stored at Cushing, Okla., increased by 1.3 million bbl although overall US oil inventories fell.

The crude oil contract for November delivery fell 70¢ on the New York market Oct. 12 to settle at $50.60/bbl after the US Energy Information Administration reported oil levels stored at Cushing, Okla., increased by 1.3 million bbl although overall US oil inventories fell.

The Cushing increase added to growing concerns that US oil production will offset efforts by the Organization of Petroleum Exporting Countries and other major producers to reduce ample world oil supplies.

The Weekly Petroleum Status Report showed a 2.7 million-bbl drop in the overall commercial US oil inventory, excluding the Strategic Petroleum Reserve, for the week ended Oct. 6. Analysts and traders surveyed by The Wall Street Journal in advance had expected supplies would fall 1.7 million bbl (OGJ Online, Oct. 12, 2017).

The drop in total supplies was related to tropical storm and hurricane activity that caused many Gulf of Mexico platforms to be evacuated temporarily.

Also on Oct. 12, EIA forecast total US crude oil production will average 9.2 million b/d in 2017 and 9.9 million b/d in 2018.

US oil production fell 81,000 b/d for the week ended Oct. 6 to 9.48 million b/d. Production across the Lower 48 states declined 87,000 b/d to 8.978 million b/d while Alaska’s production increased 6,000 b/d to 503,000 b/d, EIA said.

Energy prices

The November light, sweet crude contract on the New York Mercantile Exchange dropped 70¢ to $50.60/bbl on Oct. 12. The December contract was down 67¢ to $50.93/bbl.

The NYMEX natural gas price for November rose a 10¢ to a rounded $2.98/MMbtu. The Henry Hub cash gas price was $2.91/MMbtu, down 2¢.

Heating oil for November decreased 2¢ to $1.76/gal. The NYMEX reformulated gasoline blendstock for November fell nearly 3¢ to a rounded $1.58/gal.

The Brent crude contract for December on London’s ICE fell by 69¢ to $56.25/bbl. The January contract was down 66¢ to $56.07/bbl. The gas oil contract for October dropped $2.50 to $521.50/tonne.

OPEC’s basket of crudes for Oct. 12 was $54.44/bbl, down 10¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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