MARKET WATCH: Oil prices climb on anticipated US inventory report, China’s expanding economy

Crude oil prices rebounded slightly on the New York market Oct. 21 as traders and analysts anticipated a build in US crude oil inventories for the week ended Oct. 17. Separately, a better-than-expected economic indicator from China also supported Oct. 21 oil prices.

Crude oil prices rebounded slightly on the New York market Oct. 21 as traders and analysts anticipated a build in US crude oil inventories for the week ended Oct. 17. Separately, a better-than-expected economic indicator from China also supported Oct. 21 oil prices.

China’s economy posted third-quarter quarterly growth of 7.3% year-over-year, the National Bureau of Statistics said. Although marking the lowest growth pace in 5 years, it was still slightly better than the 7.2% gain that economists expected.

The country’s industrial output rose 8% during September compared with 6.9% during August. China also said its refineries processed a record amount of crude oil during September.

Meanwhile, the US Energy Information Administration estimated commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased 7.1 million bbl for the week ended Oct. 17 compared with the week before.

At 377.7 million bbl, crude oil inventories are near the upper limit of the average range for this time of year, EIA said in its weekly petroleum status report.

The gain was bigger than anticipated. Before the EIA report was released, analysts surveyed in by the Wall Street Journal said they expected crude oil supplies would increase 3.1 million bbl.

Separately, the American Petroleum Institute said its own estimate for last week showed a build of 1.2 million bbl.

BNP Paribas SA analysts said in a research note that “domestic production and crude imports are combining to exceed demand for crude from refineries that have been constrained by seasonal refinery maintenance.”

Gasoline inventories down

Total motor gasoline inventories decreased 1.3 million bbl for the week ended Oct. 17, which EIA said was the lower half of the average range. Finished gasoline inventories increased while blending components inventories decreased.

Distillate fuel inventories increased 1 million bbl last week but are in the lower half of the average range for this time of year. Propane-propylene inventories rose 200,000 bbl last week and are well above the upper limit of the average range.

Refinery inputs averaged 15.2 million b/d for the week ended Oct. 17, which was 113,000 b/d less than the previous week’s average. Refineries operated at 86.7% of capacity.

Gasoline production increased last week, averaging over 9.3 million b/d. Distillate fuel production increased last week, averaging 4.6 million b/d.

US crude oil imports averaged about 7.5 million b/d last week, down by 263,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged about 7.6 million b/d, which was 5.8% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 438,000 b/d while distillate fuel imports averaged 89,000 b/d.

Energy prices

The New York Mercantile Exchange November crude oil contract rose 10¢ on Oct. 21, closing at $82.81/bbl. The December contract price gained 58¢ to $82.49/bbl.

The natural gas contract for November climbed 4¢ to a rounded $3.71/MMbtu. The cash gas price at Henry Hub, La., was up 7¢, closing at $3.68/MMbtu.

Heating oil for November delivery rose by a rounded 2.8¢ to a rounded $2.51/gal. Reformulated gasoline stock for oxygenate blending for November delivery climbed 1.3¢ to a rounded $2.21/gal.

The December ICE contract for Brent crude oil was up 82¢ to close at $86.22/bbl. The January 2015 contract was up 73¢ to $86.58/bbl. The ICE gas oil contract for November gained $4.25, settling at $735.75/tonne.

The average price for OPEC’s basket of 12 benchmark crudes was $82.09/bbl on Oct. 21, up 28¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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