Sam Fletcher
Senior Writer
HOUSTON, July 28 -- Energy prices rebounded Tuesday with reports of refinery problems in Germany, the Netherlands, Turkey, and Japan, as well as speculation that the next report on US crude inventories would be bullish.
Early Wednesday, the US Energy Information Administration reported commercial US crude inventories increased by 1.2 million bbl to 300.5 million bbl during the week ended July 23, near the middle of the average range for this time of year. Distillate stocks rose by 700,000 bbl to 119.1 million bbl, with an increase in heating oil more than compensating for a slight decline in diesel fuel. However, gasoline inventories fell by 700,000 bbl to 297.7 million bbl in the same period.
Record crude imports
US imports of crude averaged a record 11.3 million bbl during the week ended July 23, up by more than 1.4 million b/d from the previous week. "It appears that imports from Nigeria were extremely high, with significant quantities arriving from Canada and Mexico as well," EIA reported. Total US gasoline imports averaged nearly 1.3 million b/d, the second largest weekly average ever, with distillate imports averaging 241,000 b/d.
Crude input into US refineries averaged nearly 16.2 million b/d last week, up by 433,000 b/d from the previous week, with facilities operating at 97% capacity. Still, US production of gasoline declined slightly, averaging less than 8.8 million b/d.
Demand strengthens
Meanwhile, US demand for crude oil and petroleum products increased by 3.1% in the second quarter of this year, the strongest quarterly gain in more than 3 years, the American Petroleum Institute said Tuesday.
"Growth in gasoline deliveries (an indicator of demand) amounted to less than 0.5% when compared with a year ago," said API officials. In the first quarter of this year, a strong US economy boosted gasoline demand more than 3%. "But more recently, higher retail [gasoline] prices served to substantially slow that growth," they said.
Still, API reported, "Deliveries of jet fuel jumped more than 6% from lackluster levels a year ago as air travel demand recovered from particularly weak levels in early 2003." Demand for distillate fuel was up more than 6% in the second quarter, while use of residual fuel oil increased nearly 9% as industry and electric utilities switched from expensive natural gas as an alternative fuel.
US refineries set new production records for both gasoline and distillate fuel in the first 6 months of this year, with gasoline production up more than 3% to nearly 8.6 million b/d while distillate production rose more than 1% to some 3.7 million b/d, API said.
Energy prices
The September contract for benchmark US light, sweet crude jumped by 40¢ to $41.84/bbl Tuesday on the New York Mercantile Exchange, while the October contract was up by 29¢ to $41.26/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., also increased by 40¢ to $41.84/bbl.
Heating oil for August delivery gained 0.91¢ to $1.1224/gal Tuesday on NYMEX, while gasoline for the same month inched up by 0.24¢ to $1.243/gal. The August natural gas contract increased by 3.2¢ to $5.99/Mcf, "despite lackluster fundamentals, as crude oil rose to near an all-time record," said analysts Wednesday at Enerfax Daily.
In London, the September contract for North Sea Brent crude gained 43¢ to $38.54/bbl on the International Petroleum Exchange. Gas oil for August delivery was up by $3 to $361/tonne. However, the August natural gas contract lost 5.6¢ to the equivalent of $3.87/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes gained 25¢ to $37.27/bbl Tuesday.
Contact Sam Fletcher at [email protected]
