MARKET WATCH: Oil prices climb on steeply lower US crude inventories

The light, sweet crude oil price for October delivery approached $49/bbl on the New York market July 27 while the Brent crude oil price for October settled at $51.10/bbl. Analysts attributed the price hike to steeply lower US oil inventories.

The light, sweet crude oil price for October delivery approached $49/bbl on the New York market July 27 while the Brent crude oil price for October settled at $51.10/bbl. Analysts attributed the price hike to steeply lower US oil inventories.

The US Energy Information Administration said commercial crude oil inventories, excluding the Strategic Petroleum Reserve, dropped 7.2 million bbl for the week ended July 21 compared with the previous week.

EIA’s latest estimated crude oil total was 483.4 million bbl (OGJ Online, July. 26, 2017). Separately, the American Petroleum Institute estimated a decline of 10.2 million bbl for the week ended July 21.

Total US oil production also declined. EIA’s Weekly Petroleum Status Report showed total US production at 9.41 million b/d for the week ended July 21, down 19,000 b/d from the previous week.

Production across the Lower 48 increased 35,000 b/d to 9 million b/d. Alaska production fell 54,000 b/d to 405,000 b/d for the week ended July 21.

John Laursen, S&P Global Platts oil editor, attributed the steep decline in US crude oil inventories to robust refinery runs and strong gasoline demand.

US crude oil exports rose 302,000 b/d to 1.03 million b/d for the week ended July 21, breaching 1 million b/d for the first time since the week ended May 26 when exports averaged a record 1.303 million b/d, S&P Global Platts noted.

US total crude imports rose 48,000 b/d to 8.044 million b/d, yet net imports declined given the jump in exports.

Energy prices

The September light, sweet crude contract on NYMEX gained 86¢ on July 26 to settle at $48.75/bbl. The October contract also added 83¢ to close at $48.85/bbl.

The NYMEX natural gas price for August decreased 2¢ to a rounded $2.92/MMbtu. The Henry Hub cash gas price fell 4¢ to $2.92/MMbtu.

Heating oil for August gained nearly 3¢ to a rounded $1.59/gal. Reformulated gasoline stock for oxygenate blending for August rose 2¢ to a rounded $1.62/gal.

The Brent crude contract for September on London’s ICE gained 77¢ to $50.97/bbl. The October contract was up 74¢ to $51.10/bbl.

The August gas oil contract gained $8.50 to $470.25/tonne. OPEC’s basket of crudes on July 26 was $48.51/bbl, up $1.40.

Contact Paula Dittrick at paulad@ogjonline.com.

More in General Interest