MARKET WATCH: Oil prices drop modestly on US crude inventory gain
Crude oil prices fell modestly on the New York and London markets Sept. 26 after the US Energy Information Administration showed an unexpected build in US oil inventories. But crude prices regained upward momentum during Sept. 27 trading, hovering near 4-year highs.
On Sept. 27, prices rose after US Energy Sec. Rick Perry said that there are no plans to release oil from the US Strategic Petroleum Reserve.
Warren Patterson, ING Bank commodities strategist, said, “There had been a growing view in the market that the US would take such action…to counter the impact from sanctions on Iran.”
In the Sept. 26 settlement, US light, sweet crude for November delivery settled at nearly $71.60/bbl while Brent crude oil for November settled just under $81.35/bbl.
The EIA said US oil inventories rose by a rounded 1.9 million bbl during the week ended Sept. 21 to a total of 396 million bbl. US crude oil inventories are about 2% below the 5-year average for this time of year, EIA said (OGJ Online, Sept. 27, 2018).
Separately, the American Petroleum Institute said its own survey showed an increase of 2.903 million bbl in US oil supplies last week.
The EIA’s Weekly Petroleum Status Report said US oil production rose 100,000 b/d for the week ended Sept. 21 to 11.1 million b/d total.
Energy prices
The light, sweet crude contract for November delivery on the New York Mercantile Exchange fell 71¢ to $71.57/bbl on Sept. 26. The December contract dropped 69¢ to settle at $71.41/bbl.
The NYMEX natural gas price for October was down 6¢ to a rounded $3.02/MMbtu. The Henry Hub cash gas held unchanged from the previous day at $3.14/MMbtu.
Ultralow-sulfur diesel for October declined less than a penny to remain at a rounded $2.30/gal. The NYMEX reformulated gasoline blendstock for October fell nearly 1¢ to settle at a rounded $2.06/gal.
Brent crude oil for November declined 53¢ to $81.34/bbl on London’s International Commodity Exchange. The December contract fell 47¢ to $80.79/bbl. The gas oil contract for October dropped $3 to settle at $710.75/tonne on Sept. 26.
The Organization of Petroleum Exporting Countries’ basket of crudes for Sept. 26 averaged $81.58/bbl, up $1.14.
Contact Paula Dittrick at [email protected].
About the Author
Paula Dittrick
Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.