US light, sweet crude oil prices rose more than $1/bbl to settle above $60/bbl on the New York market while Brent crude oil settled above $66/bbl on the London market on May 12 as the Organization of Petroleum Exporting Countries increased its global oil demand forecast and as oil traders awaited weekly US government inventory numbers.
For the week ended May 8, and excluding the Strategic Petroleum Reserve, commercial crude oil inventories decreased 2.2 million bbl from the previous week. At 484.8 million bbl, US crude oil inventories remain at the highest level for this time of year in at least 80 years, the US Energy Information Administration said in the weekly Petroleum Status Report, released May 13.
OPEC, meanwhile, in its Monthly Oil Market Report, released May 12, raised its forecast for 2015 oil demand to 92.5 million b/d, up 1.18 million b/d from 2014.
Separately, EIA’s Short-Term Energy Outlook said moderating inventory builds at Cushing, Okla., along with an expected decline in US tight oil production have put upward pressure on US oil prices.
In its STEO released May 12, EIA forecast the Brent crude oil price will average $61/bbl in 2015, and that US oil prices on the New York futures market will average $55/bbl.
Earlier this week, EIA’s latest Drilling Productivity Report showed crude production from seven key US unconventional regions fell 54,000 b/d in May compared with April. Shale oil production is forecast to fall by 86,000 b/d in June compared with May, EIA said (OGJ Online, May 12, 2015).
“The EIA forecasts are certainly providing support to the market, in anticipation of a decline in crude oil production over the next couple months at the same time that global oil demand is increasing,” Andrew Lipow, president of Lipow Oil Associates consulting in Houston, told the Wall Street Journal.
Gasoline inventories drop
Total US motor gasoline inventories decreased 1.1 million bbl for the week ended May 8, but are well above the upper limit of the average range, EIA said in its weekly inventory report. Both finished gasoline inventories and blending components inventories decreased last week.
Distillate fuel inventories decreased 2.5 million bbl and are in the lower half of the average range for this time of year. Propane-propylene inventories rose 1.9 million bbl, which EIA said was well above the upper limit of the average range.
US refinery inputs averaged 16 million b/d during the week ended May 8, which was 379,000 b/d less than the previous week’s average. Refineries operated at 91.2% of capacity last week.
Gasoline production increased last week, averaging 9.7 million b/d. Distillate fuel production decreased last week, averaging 4.9 million b/d.
US crude oil imports averaged 6.9 million b/d, up 340,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged about 7.2 million b/d, 2.2% below the same 4-week period last year.
Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 776,000 b/d while distillate fuel imports averaged 294,000 b/d.
The natural gas contract for June increased 9.5¢ to a rounded $2.90/MMbtu. The Henry Hub, La., gas price was $2.86/MMbtu, up 1¢.
Heating oil for June rose 5¢ to a rounded $2/gal on May 12. The price for reformulated gasoline stock for oxygenates blending for June also increased 5¢ to $2.04/gal.
The June ICE contract for Brent crude was up $1.95 to $66.86/bbl, while the July contract was up $1.76 to $67.38/bbl. The ICE gas oil contract for June was up $18 to $607.25/tonne.
The average price for the OPEC’s basket of 12 benchmark crudes for May 12 was $62.49/bbl, up 46¢. The OPEC Secretariat office will be closed May 14.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.