The light, sweet oil price for April delivery fell more than $1/bbl on the New York market for a second consecutive day Mar. 8, which analysts attributed to falling gasoline prices as well as rising US oil production and a strengthening US dollar.
The US Energy Information Administration said US crude oil production reached almost 10.4 million b/d for the week ended Mar. 2 (OGJ Online, Mar. 8, 2017).
Meanwhile, the US dollar rose in value against other currencies. Oil is traded on world markets in dollars, so a stronger dollar makes oil more expensive for buyers using other currencies.
The US oil futures benchmark and the Brent crude benchmark on the London market on Mar. 8 settled at their lowest levels since Feb. 13. US gasoline futures for April also fell.
“There’s a lot of pressure on the front end of gasoline,” Donald Morton with Herbert J. Sims & Co. told the Wall Street Journal. “Crude oil is just following it down.”
Meanwhile, Colonial Pipeline restarted a gasoline pipeline sooner than some had anticipated.
Platts said Colonial Pipeline confirmed Mar. 9 that it had restarted its gasoline-only Line 1 after an integrity issue and restarted Line 3, a product line, after a release.
The company told Platts that Line 1 was shut Mar. 8 to investigate an undisclosed issue. The 1.37 million-b/d line ships gasoline from Pasadena, Tex., to North Carolina.
Line 3 was shut Mar. 7 after a small release was found in Harford County, Md. The line carries 885,000 b/d of gasoline, diesel, and other products from Greensboro to New Jersey. There was no estimate provided on the size of the release.
Energy prices
The April light, sweet crude contract on the NYMEX declined $1.03 on Mar. 8 to settle at $60.12/bbl. The May contract fell 96¢ to $60.06/bbl.
The NYMEX natural gas price for April fell 2¢ to a rounded $2.76/MMbtu. The Henry Hub cash gas price was down 6¢ to $2.71/MMbtu on Mar. 8.
Ultralow-sulfur diesel for April decreased by 1.5¢ to a rounded $1.86/gal. The NYMEX reformulated gasoline blendstock for April declined 4¢ to $1.87/gal.
Brent crude oil for May settled down 73¢ to $63.61/bbl on London’s International Commodity Exchange. The June contract was down 71¢ to $63.44/bbl. The gas oil contract for March was $566.75/tonne, down $5.
The Organization of Petroleum Exporting Countries’ basket of crudes was $62.68/bbl on Mar. 8, down 83¢.
Contact Paula Dittrick at [email protected].
