By OGJ editors
HOUSTON, Apr. 1 -- Oil futures prices dipped as traders switched their attention to a government report Wednesday of yet another jump in US crude inventories and away from the Organization of Petroleum Exporting Countries' decision to proceed with an April production cut.
The US Energy Information Administration said Wednesday that commercial US crude inventories jumped by 5.7 million bbl to 294.3 million bbl during the week ended Mar. 26. US gasoline stocks increased by 1.4 million bbl to 200.9 million bbl during the same period, while distillate inventories dipped by 700,000 bbl to 109.7 million bbl, with a drop in heating oil more than offsetting a small increase in diesel fuel.
US imports of crude averaged nearly 10.1 million b/d last week, down by 31,000 b/d from the previous week. Crude imports from Saudi Arabia were "relatively high" during the period, said EIA officials. Total gasoline imports averaged nearly 1.2 million b/d, the second highest weekly average ever, they said.
Crude inputs into US refineries averaged more than 14.6 million b/d in the week ended Mar. 26, up by 68,000 b/d from the previous week. Crude inputs into Gulf Coast refineries averaged nearly 7.2 million b/d, the highest average since the week ended Jan. 2, said EIA.
"The US refining system again reveals a lack of flexibility and headroom, sending gasoline prices surging further upwards," said Paul Horsnell, head of energy research at Barclays Capital Inc., London. "The focus remains on gasoline in the weekly [EIA] data. The secondary period of seasonal inventory builds has started, but data [are] still showing a system that is very stretched. Product yields are now being very heavily skewed towards gasoline. Crude oil inventory build will abate in coming weeks as refinery runs rise."
Energy prices
The May contract for benchmark US light, sweet crudes lost 49¢ to $35.76/bbl Wednesday on the New York Mercantile Exchange, wiping out part of the previous session's gain in anticipation of OPEC's decision (OGJ Online, Mar. 31, 2004). The June position lost 42¢ to $35.08/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., dropped 47¢ to $35.78/bbl.
Gasoline for April delivery fell by 3.18¢ to $1.1244/gal Wednesday on NYMEX. Heating oil for the same month was down by 2.07¢ to 88.64¢/gal. However, the May natural gas contract shot up by 18.7¢ to $5.93/Mcf Wednesday. Firmer physical gas market prices in the days ahead, due to unseasonably cooler weather in the Northeast and Midwest US, are likely to limit the downside of near-term natural gas prices, said analysts Thursday at Enerfax Daily.
In London, the May contract for North Sea Brent oil fell by 94¢ to $31.51/bbl Wednesday on the International Petroleum Exchange. Gas oil for April delivery lost $5.75 to $281/tonne. However, the May natural gas contract inched up by 0.38¢ to the equivalent of $3.54/Mcf on IPE.
The average price for OPEC's basket of seven benchmark crudes declined by 21¢ to the equivalent of $31.49/bbl Wednesday.
