Crude oil benchmark prices jumped on markets in New York and London July 10 with light, sweet crude for August and September pushing past the $60/bbl mark and the Brent contract for September settling just above $67/bbl as crude supplies continue to fall and a storm in the Gulf of Mexico threatens short-term disruptions.
The American Petroleum Institute on July 9 estimated US crude stockpiles fell by 8.1 million bbl to 461.4 million bbl for the week ended July 5. In its data released July 10, the US Energy Information Administration reported US crude oil inventories for the week decreased by 9.5 million bbl from the previous week.
A tropical weather system in the Gulf of Mexico—expected to become Tropical Storm Barry—has operators in the region activating applicable shut-in procedures. The storm’s impact on oil and natural gas production from the region is expected to be short-lived.
From operator reports as of the morning of July 10, the Bureau of Safety and Environmental Enforcement estimates that 31.89% of the current oil production in the gulf has been shut in, which equates to 602,715 b/d of oil. It is estimated that 17.85% of the natural gas production, or 496.2 MMcfd, in the gulf has been shut-in.
After the storm has passed, facilities will be inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back on line immediately.
Energy prices
Light, sweet crude oil on the New York Mercantile Exchange for August delivery rose $2.60 to $60.43/bbl on July 10 while the September contract increased $2.58 to $60.52/bbl.
NYMEX natural gas for August added rounded 2¢ to a $2.44/MMbtu.
Ultralow-sulfur diesel for August rose 8¢ to $1.99/gal. The NYMEX reformulated gasoline blendstock for August increased almost 8¢ to a rounded $2.01/gal.
Brent crude for September jumped $2.85 to $67.01/bbl. The October price increased $2.76 to settle at $66.69/bbl.
The gas oil contract for July rose $18.25 to $594.50/tonne on July 10.
The average for the Organization of Petroleum Exporting Countries’ basket of crudes was $66.10/bbl on July 10, up $1.75.
