MARKET WATCH: Crude oil futures prices rebound on Russia-Ukraine talks

Crude oil futures prices rebounded on both the New York and London markets Sept. 3, which analysts attributed largely to comments from Russian President Vladimir Putin that he expected fighting in Ukraine to end within days.

Crude oil futures prices rebounded on both the New York and London markets Sept. 3, which analysts attributed largely to comments from Russian President Vladimir Putin that he expected fighting in Ukraine to end within days.

Putin’s comments came after he talked on the phone with Ukrainian President Petro Poroshenko. But Ukraine and US officials took a wait-and-see attitude. Ukraine Prime Minister Arseniy Yatsenyuk questioned Putin’s sincerity regarding a ceasefire. US President Barack Obama said it is “too early to tell” if the announced agreement will hold up.

Meanwhile, the Energy Information Administration released its weekly oil inventory report showing a drop in supplies. The weekly report was issued Sept. 4, one day later than normal following the US Labor Day holiday on Sept. 1.

US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 900,000 bbl for the week ended Aug. 29 compared with the previous week, EIA said. At an estimated 359.6 million bbl, crude oil inventories are in the upper half of the average range for this time of year, the weekly petroleum status report indicated.

Analysts surveyed by the Wall Street Journal had expected oil inventories to fall by 1.1 million bbl. Separately, the government said US natural gas storage levels rose. EIA estimated gas in underground storage across the Lower 48 at 2.7 tcf as of Aug. 29.

That represented a net increase of 79 bcf from the previous week, EIA said in its weekly gas storage report. Stocks were 471 bcf less than last year at this time and 495 bcf below the 5-year average of 3.2 tcf.

Gasoline supplies decline

EIA’s weekly petroleum report showed total motor gasoline inventories decreased by 2.3 million bbl for the week ended Aug. 29, and EIA described that level as being in the middle of the average range. Both finished gasoline inventories and blending components inventories decreased last week.

Distillate fuel inventories increased by 600,000 bbl but remain below the lower limit of the average range for this time of year. Propane-propylene inventories rose 1.4 million bbl for the week ended Aug. 29, which was above the upper limit of the average range, EIA said.

Refinery inputs averaged over 16.4 million b/d, which was 114,000 b/d less than the previous week’s average. Refineries operated at 93.3% of capacity.

Gasoline production increased, averaging 9.6 million b/d, and distillate fuel production increased, averaging 5.1 million b/d.

US crude oil imports averaged 7.7 million b/d last week, up by 42,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged about 7.7 million b/d, 5.8% below the same 4-week period last year, EIA said. Total motor gasoline imports, including both finished gasoline and gasoline blending components, for the week ended Aug. 29 averaged 801,000 b/d. Distillate fuel imports averaged 153,000 b/d.

Energy prices

The New York Mercantile Exchange October crude oil contract rebounded on Sept. 3, gaining $2.66 to $95.54/bbl. On Sept. 2, the October contract had dropped more than $3/bbl. The November contract added $2.58 to settle at $94.68/bbl.

The natural gas contract for October fell 4.3¢ to a rounded $3.85/MMbtu. On the US cash market, gas at Henry Hub, La., was $3.94/MMbtu, down 7¢ from the Sept. 3 settlement.

Heating oil for October delivery climbed by 6.9¢ to a rounded $2.87/gal. Reformulated gasoline stock for oxygenate blending for October delivery gained 7.7¢ to a rounded $2.62/gal.

The October ICE contract for Brent crude delivery rebounded by $2.43 to $102.77/bbl. The November Brent contract added $2.38 to $103.34/bbl. The ICE gas oil contract for September climbed $8 to $862.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Sept. 3 was $98.65/bbl, down 29¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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