MARKET WATCH: Crude oil prices drop again awaiting OPEC meeting

US light, sweet crude oil prices dropped below $75/bbl Nov. 18 on the New York market, prompting analysts to suggest prices will see little upward movement until after members of the Organization of Petroleum Exporting Countries meet Nov. 27 in Vienna.

US light, sweet crude oil prices dropped below $75/bbl Nov. 18 on the New York market, prompting analysts to suggest prices will see little upward movement until after members of the Organization of Petroleum Exporting Countries meet Nov. 27 in Vienna.

Harry Tchlinguirian, head of commodities at BNP Paribas, told the Wall Street Journal that money managers now are reluctant to support higher oil prices given uncertainly about what OPEC might do. Currently, a potential sharp fall in oil prices is more likely than any steep upward momentum, he said.

Meanwhile, US crude oil and petroleum product inventories increased for the week ended Nov. 14 compared with the previous week, showed the weekly petroleum status report released Nov. 19 by the US Energy Information Administration.

US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased 2.6 million bbl. At 381.1 million bbl, US crude oil inventories are in the upper half of the average range for this time of year, EIA said.

Total gasoline inventories increased 1 million bbl, which EIA marked the middle of the average range. Both finished gasoline inventories and blending components inventories increased.

Distillate fuel inventories decreased by 2.1 million bbl for the week ended Nov. 14 compared with the previous week. Propane-propylene inventories increased 100,000 bbl, which is well above the upper limit of the average range, EIA said.

US refinery inputs averaged more than 15.9 million b/d, which was 161,000 b/d more than the previous week. Refineries operated by 91.2% capacity last week.

US crude oil imports averaged more than 7.6 million b/d, up 761,000 b/d. Over 4 weeks, imports averaged 7.1 million b/d, which was 6.9% below the same 4-week period last year.

Energy prices

The New York Mercantile Exchange December crude oil contract fell $1.03 on Nov. 18, closing at $74.61/bbl. The January 2015 contract dropped $1.02 to $74.64/bbl.

The natural gas contract for December decreased by 9¢ to a rounded $4.24/MMbtu. The cash gas price at Henry Hub, La., was $4.32/MMbtu, up 10¢.

Heating oil for December delivery was down 2.2¢ to a rounded $2.38/gal. Reformulated gasoline stock for oxygenate blending for December delivery gained nearly a penny to a rounded $2.04/gal.

The January 2015 ICE contract for Brent crude oil was down 84¢ to $78.47/bbl. The February 2015 contract dropped 87¢ to $79.07/bbl. The ICE gas oil contract for November rose 25¢, settling at $698/tonne.

The average price for OPEC’s basket of 12 benchmark crudes on Nov. 18 was $74.36/bbl, down 46¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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