MARKET WATCH: NYMEX crude prices climb modestly despite surprise inventory build

Benchmark crude oil prices gained modestly on the New York and London markets on Apr. 5 and continued rising on Apr. 6 after a weekly US inventory report on oil supplies indicated that US crude stocks soon could reverse direction and start dropping.
April 6, 2017
2 min read

Benchmark crude oil prices gained modestly on the New York and London markets on Apr. 5 and continued rising on Apr. 6 after a weekly US inventory report on oil supplies indicated that US crude stocks soon could reverse direction and start dropping.

The estimate from the US Energy Information Administration showed a surprise increase in crude supplies. The Petroleum Status Report showed commercial crude inventories, excluding the Strategic Petroleum Reserve, rose 1.6 million bbl to 535.5 million bbl for the week ended Mar. 31 (OGJ Online, Apr. 5, 2017).

Analysts noted that a likely pickup in refining activity could help end a weekly trend of building crude oil stocks.

Giovanni Staunovo, analyst at UBS, said, “Margins have improved for refineries so that should be supportive.” He said refinery activity typically picks up in May but that it might come earlier this year.

Michael Tran, an analyst with Royal Bank of Canada, said US crude oil imports from Saudi Arabia have averaged some 200,000 b/d higher through this year’s first quarter than the same period last year.

“That said, it is misleading for market participants to assume that the Saudis are flooding the US with excess barrels,” Tran said.

US oil production climbed across the Lower 48 and Alaska, reached 9.19 million b/d for the week ended Mar. 31, up 52,000 b/d. Lower 48 production accounted for 8.66 million b/d while Alaska production accounted for 533,000 b/d.

Energy prices

The crude oil contract for May delivery on the New York Mercantile Exchange gained 12¢ on Apr. 5 to close at $51.15/bbl while the June contract rose 9¢ to $51.60/bbl.

The natural gas price for May fell nearly 3¢ to a rounded $3.27/MMbtu. The Henry Hub cash gas price closed Apr. 5 at $3.21/MMbtu, up 14¢.

Heating oil for May was up 1¢ to $1.60/gal. Reformulated gasoline stock for oxygenate blending for May declined less than 1¢ to $1.71/gal.

The Brent crude contract for June on London’s ICE gained 19¢ to $54.36/bbl. The July contract was up by 19¢ to $54.63/bbl. The gas oil contract settled at $481/tonne, up $3.25.

The average price for OPEC’s basket of benchmark crudes on Apr. 5 was $51.95/bbl, up $1.36.

Contact Paula Dittrick at [email protected].

About the Author

Paula Dittrick

Senior Staff Writer

Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.

Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.

Sign up for Oil & Gas Journal Newsletters