MARKET WATCH: US crude oil prices rebound modestly awaiting inventory report

Crude oil prices rose modestly on the New York market Dec. 9 while analysts awaited the US government weekly inventory report on crude oil and product supplies, which showed an increase despite some expectations that the crude oil level would decline.

Crude oil prices rose modestly on the New York market Dec. 9 while analysts awaited the US government weekly inventory report on crude oil and product supplies, which showed an increase despite some expectations that the crude oil level would decline.

Still, Tim Evans at Citi Futures noted that US oil inventories are expected to fall in coming weeks because of seasonal refining schedules.

The US Energy Information Administration on Dec. 10 reported commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased 1.5 million bbl for the week ended Dec. 5 from the previous week.

At 380.8 million bbl, inventories are above the upper limit of the average range for this time of year.

The Organization of Petroleum Exporting Countries reduced its world oil demand growth forecast for 2015 by 70,000 b/d than its earlier forecast. World oil demand now is expected to increase by 1.12 million b/d next year with total demand to reach 92.26 million b/d, OPEC said.

“The downward revision reflects the upward adjustment of non-OPEC supply,” OPEC said in its monthly Oil Market Report.

US gasoline inventory climbs

Total motor gasoline inventories increased by 8.2 million bbl last week, which EIA described as being the middle of the average range. Both finished gasoline inventories and blending components inventories increased last week.

Distillate fuel inventories increased by 5.6 million bbl last week but are near the lower limit of the average range for this time of year. Propane-propylene inventories fell 300,000 bbl last week but are well above the upper limit of the average range.

US refinery inputs averaged over 16.6 million b/d for the week ended Dec. 5, which was 271,000 b/d more than the previous week’s average. Refineries operated at 95.4% of capacity.

Gasoline production decreased last week, averaging about 9.2 million b/d. Distillate fuel production increased last week, averaging over 5.2 million b/d.

US crude oil imports averaged about 7.7 million b/d, up by 365,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged over 7.5 million b/d. Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 561,000 b/d. Distillate fuel imports averaged 175,000 b/d.

Energy prices

The New York Mercantile Exchange January crude oil contract gained 77¢ on Dec. 9, closing at $63.82/bbl. The February contract rose 77¢ to $63.98/bbl.

The natural gas contract for January settled up 5.7¢ to a rounded $3.65/MMbtu. The cash gas price at Henry Hub, La., was $3.60 on Dec. 9, up 11¢.

“Gas prices have swung amid a wide range of more than 90c, testing lows below $3.60/MMbtu and highs of about $4.50/MMbtu,” Barclays analysts said in a recent note, adding they “view either extreme as unsustainable.”

Barclays maintained its fourth quarter NYMEX gas price forecast of $3.95/MMbtu.

Heating oil for January delivery climbed 2.9¢ to a rounded $2.08/gal. Reformulated gasoline stock for oxygenate blending for January was up 1.7¢ to a rounded $1.72/gal.

The January 2015 ICE contract for Brent crude oil rose 65¢ to $66.84/bbl. The February contract climbed 58¢ to $67.22/bbl. The ICE gas oil contract for December rose $2.50, settling at $604/tonne.

The average price for OPEC’s basket of 12 benchmark crudes on Dec. 8 was $62.33/bbl, down $1.45.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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