MARKET WATCH: NYMEX crude oil hovers around $48/bbl on higher inventory

Crude oil prices fell slightly on the New York market to settle just above $48/bbl Mar. 11 after a weekly government report showed US oil inventories climbed again to remain at record levels.

Crude oil prices fell slightly on the New York market to settle just above $48/bbl Mar. 11 after a weekly government report showed US oil inventories climbed again to remain at record levels.

The Energy Information Administration estimated US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 4.5 million bbl (OGJ Online, Mar. 11, 2014).

Paris-based banking and financial services firm Societe Generale SA issued a report saying, “There is more downside than upside to crude prices in the near term due to ample crude supplies and seasonal weakness in refinery crude runs,” because of scheduled maintenance.

Brent crude oil prices rose by more than $1/bbl on the London market. Oil advisory firm Ritterbusch & Associates of Chicago attributed the boost in Brent prices to lingering concerns about potential supply disruptions.

“Brent is being forced to price in some geopolitical risk premium as increasing military activity in the area of Iraqi and Libyan oil fields could still threaten supply availability,” R&A said in a research note.

Regarding natural gas in underground storage across the Lower 48, EIA estimated levels at 1.5 tcf as of Mar. 6, which was a net decline of 198 bcf from the previous week.

Stocks were 483 bcf higher than last year at this time and 225 bcf below the 5-year average of 1.7 tcf, the weekly gas storage report said.

Energy prices

The New York Mercantile Exchange April crude oil contract fell 12¢ to $48.17/bbl Mar. 11, and the May contract declined 5¢ to settle at $50.02/bbl.

The natural gas contract for April rose 9.2¢ to a rounded $2.82/MMbtu. The Henry Hub, La., gas price was $2.79/MMbtu, up 6¢.

Heating oil for April edged up by less than a penny to a rounded $1.82/gal. Reformulated gasoline stock for oxygenate blending for April delivery was up by nearly a penny to a rounded $1.83/gal.

The April ICE contract for Brent crude oil climbed by $1.15, settling at $57.54/bbl, and the May contract gained $1.01 to $57.88/bbl. The ICE gas oil contract for March dropped $3.75 to $557.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Mar. 11 was $53.03/bbl, down 78¢.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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