MARKET WATCH: Oil, gas prices drop again
Paula Dittrick
OGJ Senior Staff Writer
HOUSTON, Aug. 12 -- Energy prices generally declined Aug. 11, with the front-month contract for benchmark US crude dipping below $70/bbl on the New York market for the first time in 7 days.
Various organizations said world crude oil demand is expected to improve gradually as economies wait to recover from the recession.
The US Energy Information Administration (EIA) on Aug. 11 forecast world oil consumption at 83.76 million b/d this year, a decrease of 90,000 b/d from the forecast made last month. EIA also cut its 2010 forecast by 90,000 b/d from its forecast made in July. EIA’s latest 2010 forecast is 84.7 million b/d.
Paris-based International Energy Agency (IEA) said any evidence of global recovery remains limited.
In its monthly market report on Aug. 12, IEA said global oil demand for 2010, nearly unchanged from a month earlier, is seen recovering by 1.3 million b/d in 2010. The global oil demand forecast for 2010 was revised up by 70,000 b/d to 85.3 million b/d. World oil demand peaked at 86.5 million b/d in 2007 (OGJ Online, Aug. 12, 2009).
US inventories
In its weekly report, EIA reported commercial inventories of benchmark US crudes increased by 2.5 million bbl to 352 million bbl in the week ended Aug. 7.
Gasoline inventories fell by 1 million bbl to 211.9 million bbl during the same period. Distillate fuel inventories increased by 800,000 bbl to 162.3 million bbl, EIA said.
Meanwhile, the American Petroleum Institute reported an unexpected fall of 1.42 million bbl in crude stocks last week to 348.5 million bbl.
Energy prices
The September contract for benchmark US sweet, light crudes slumped $1.15 to $69.45/bbl Aug. 11 on the New York Mercantile Exchange. The October contract declined $1.26 to $71.35/bbl. On the US spot market, West Texas Intermediate at Cushing was down $1.15 to $69.45/bbl. Heating oil for September delivery dropped 1.59¢ to $1.91/gal on NYMEX. Reformulated blend stock for oxygenate blending (RBOB) for the same month gained 1.48¢ to $2.042/gal.
The September natural gas contract dropped 10¢ to $3.541/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., dropped 12.5¢ to $3.475/MMbtu.
In London, the September IPE contract for North Sea Brent crude fell $1.04 to $72.46/bbl. The August gas oil contract was down $11.25 to $594.25/tonne.
The Organization of Petroleum Exporting Countries reported the price of OPEC’s basket of 12 crudes stood at $71.06/bbl on Aug. 11, down 62¢ from the previous day.
Contact Paula Dittrick at [email protected].