MARKET WATCH: Brent crude oil price falls, but still above $80/bbl

Brent crude oil prices dropped more than $1/bbl but still hovered above $80/bbl in Nov. 12 settlement prices for December and January 2015 delivery while prices for US light, sweet crude dropped more than 70¢/bbl on the New York market.

Brent crude oil prices dropped more than $1/bbl but still hovered above $80/bbl in Nov. 12 settlement prices for December and January 2015 delivery while prices for US light, sweet crude dropped more than 70¢/bbl on the New York market.

Citi Futures analyst Tim Evans told the Dow Jones Newswires that market speculation continues to mount pending the Nov. 27 meeting of the Organization of Petroleum Exporting Countries.

“Brent prices imply that the market remains more concerned with potential oversupply than with the recent production outages in Libya,” Evans said.

OPEC issued its Monthly Oil Market report, saying its crude price basket average fell more than $10/bbl from September to an average $85.06/bbl in October, and OPEC attributed the drop to concerns about “global economic growth” although OPEC’s world economic growth expectations for 2014-15 remain unchanged.

“The Brent-WTI spread has contracted further in October to average $3.70/bbl, the lowest difference in 15 months,” the November OPEC report said in reference to US light, sweet crude oil.

Separately, the US Energy Information Administration projects Brent crude oil prices will average $83/bbl in 2015, which was $18/bbl lower than it forecast in last month’s Short-Term Energy Outlook (OGJ Online, Nov. 12, 2014).

EIA released its weekly petroleum status report on Nov. 13, one day later than normal because of the Veterans Day holiday. The report showed a decline in crude oil supplies.

US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased 1.7 million bbl for the week ended Nov. 7 compared with the previous week. At 378.5 million bbl, crude oil inventories are in the upper half of the average range for this time of year, EIA said.

Gasoline inventory grows

Total motor gasoline inventories increased 1.8 million bbl, and are in the lower half of the average range. Finished gasoline inventories decreased while blending components inventories increased last week.

Distillate fuel inventories decreased 2.8 million bbl and are near the lower limit of the average range for this time of year. Propane-propylene inventories rose 900,000 bbl last week and are well above the upper limit of the average range.

US refinery inputs averaged 15.8 million b/d during the week ended Nov. 7, which was 267,000 b/d more than the previous week’s average. Refineries operated at 90.1% of capacity last week. Gasoline production decreased, averaging more than 9.3 million b/d. Distillate fuel production increased last week, averaging more than 4.8 million b/d.

US crude oil imports averaged 6.9 million b/d last week, up 202,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged more than 7 million b/d, 6.8% below the same 4-week period last year. Total motor gasoline imports, including both finished gasoline and gasoline blending components, averaged 501,000 b/d last week while distillate fuel imports averaged 86,000 b/d.

Energy prices

The New York Mercantile Exchange December crude oil contract fell 76¢ on Nov. 12, closing at $77.18/bbl. The January 2015 contract dropped 72¢ to $77.15/bbl.

The natural gas contract for December declined by 6.2¢ to a rounded $4.18/MMbtu. The cash gas price at Henry Hub, La., was $4.20/MMbtu, up 14¢.

Heating oil for December delivery also was down 2¢ to a rounded $2.45/gal. Reformulated gasoline stock for oxygenate blending for December delivery rose by a fraction of a cent to remain at a rounded $2.10/gal.

The December ICE contract for Brent crude oil was down $1.29 to $80.38/bbl. The January 2015 contract dipped by $1.27 to $81.12/bbl. The ICE gas oil contract for November held unchanged, settling at $725/tonne.

The average price for OPEC’s basket of 12 benchmark crudes dropped by 31¢ to $76.96/bbl on Nov. 12.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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