MARKET WATCH: NYMEX oil futures rebound on big US inventory draw

Crude oil futures prices rebounded on the New York market on July 16 after a weekly government inventory report showed a bigger drop in US oil supplies than analysts had expected.

JBC Energy said the 7.5-million bbl draw in oil inventories for the week ended July 11 was the biggest weekly drop in 6 months as reported by the Energy Information Administration (OGJ Online, July 16, 2014).

Refiners increased their processing volumes, and refining utilization was up by 2.2% from the previous week, EIA noted.

Regarding US underground natural gas storage in the Lower 48, EIA estimated working gas in storage at a rounded 2.1 tcf as of July 11. That represented a net increase of 107 bcf from the previous week.

Stocks were 608 bcf less than last year at this time and 727 bcf below the 5-year average of a rounded 2.86 tcf, the weekly gas storage report said on July 17.

In international news, US President Barack Obama on July 16 announced new sanctions against Russian state-controlled OAO Rosneft and three other companies because pro-Russian separatists resumed fighting in eastern Ukraine after a brief ceasefire fell apart.

Russia President Vladimir Putin warned that sanctions would have “a boomerang effect” and could drive “Russian-American relations to a dead end.” He said sanctions will prove to be “to the detriment of the long-term national interests of the American government and its people.”

Obama called the latest sanctions “significant” but “targeted.” Besides Rosneft, the sanctions are aimed at gas producer OAO Novatek, OAO Gazprombank, and Vneshekonombank.

Novatek is a gas company, and Gazprombank is a bank involved with Russia’s gas exports. VEB is a state-owned development lender. Novatek issued a statement calling itself a privately listed company that has no business activities in Ukraine.

Energy prices

The New York Mercantile Exchange August crude oil contract rebounded, adding $1.24 on July 16, closing at $101.20/bbl. The September contract gained $1.07 to $100.60/bbl.

The natural gas contract for August increased 2.2¢ to a rounded $4.12/MMbtu. On the US cash market, gas at Henry Hub, La., was $4.10/MMbtu, down 1¢.

Heating oil for August delivery edged up less than a penny to a rounded $2.86/gal. Reformulated gasoline stock for oxygenate blending for August delivery declined 1.6¢ to a rounded $2.88/gal.

The August ICE contract for Brent crude delivery was down 17¢ to $105.85/bbl. The September contract gained 29¢ to $107.17/bbl. The ICE gas oil contract for August added $8 to $881.50/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 16 was $104.44/bbl, up 79¢.

Contact Paula Dittrick at [email protected].