Crude prices continued climbing July 18 with the front-month contract up 1.5% in the New York futures market following a sharp drop in US inventory. Natural gas bounced back 5% as heat waves in the US Northeast and Midwest reduced supply storage.
It was a good day in the equity market with the Dow Jones Industrial Average and Standard & Poor’s 500 Index reaching new highs and the NASDAQ climbing to its highest level “since the heady days of mid-2000,” said analysts in the Houston office of Raymond James & Associates Inc. “The rally was fueled by bank earnings and [Federal Reserve System Chairman Ben] Bernanke’s soothing comments on Fed stimulus.”
US inventories
The Energy Information Administration reported the injection of 58 bcf of natural gas into US underground storage in the week ended July 12, less than Wall Street’s consensus for an input of 65 bcf. That raised working gas in storage to 2.745 tcf, down 414 bcf from the comparable period in 2012 and 34 bcf below the 5-year average.
“Excluding weather-related demand, there was 3.1 bcfd of additional natural gas added to storage compared with last year, and we have averaged 4.08 bcfd looser over the past 4 weeks,” Raymond James analysts reported.
Energy prices
The August contract for benchmark US light, sweet crudes escalated $1.56 to $108.04/bbl July 18 on the New York Mercantile Exchange. The September contract rose $1.46 to $107.81/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., stayed in step with the front-month futures contract, up $1.56 to $108.04/bbl.
Heating oil for August delivery increased 2.95¢ to $3.10/gal on NYMEX. Reformulated stock for oxygenate blending for the same month dipped 0.03¢ but closed essentially unchanged at a rounded $3.11/gal.
The August natural gas contract bounced back by 18.3¢ to $3.81/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., recovered 5¢ to $3.72/MMbtu.
In London, the September IPE contract for North Sea Brent increased 9¢ to $108.70/bbl. Gas oil for August gained $5 to $928.75/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes climbed 83¢ to $106.11/bbl.
Contact Sam Fletcher at [email protected].
About the Author
Sam Fletcher
Senior Writer
I'm third-generation blue-collar oil field worker, born in the great East Texas Field and completed high school in the Permian Basin of West Texas where I spent a couple of summers hustling jugs and loading shot holes on seismic crews. My family was oil field trash back when it was an insult instead of a brag on a bumper sticker. I enlisted in the US Army in 1961-1964 looking for a way out of a life of stoop-labor in the oil patch. I didn't succeed then, but a few years later when they passed a new GI Bill for Vietnam veterans, they backdated it to cover my period of enlistment and finally gave me the means to attend college. I'd wanted a career in journalism since my junior year in high school when I was editor of the school newspaper. I financed my college education with the GI bill, parttime work, and a few scholarships and earned a bachelor's degree and later a master's degree in mass communication at Texas Tech University. I worked some years on Texas daily newspapers and even taught journalism a couple of semesters at a junior college in San Antonio before joining the metropolitan Houston Post in 1973. In 1977 I became the energy reporter for the paper, primarily because I was the only writer who'd ever broke a sweat in sight of an oil rig. I covered the oil patch through its biggest boom in the 1970s, its worst depression in the 1980s, and its subsequent rise from the ashes as the industry reinvented itself yet again. When the Post folded in 1995, I made the switch to oil industry publications. At the start of the new century, I joined the Oil & Gas Journal, long the "Bible" of the oil industry. I've been writing about the oil and gas industry's successes and setbacks for a long time, and I've loved every minute of it.