MARKET WATCH: Crude oil prices gain on steep drop in US oil supplies
The light, sweet crude oil price for August delivery jumped by more than $2/bbl for a second consecutive day to settle above $72/bbl on the New York market June 27 while Brent crude climbed by more than $1/bbl to settle above $77/bbl.
Analysts attributed the crude price gains to declining US oil supplies and to geopolitical risks to world oil supply. A weekly government inventory report showed US supplies had dropped far more than expected.
The US Energy Information Administration estimated crude oil inventories fell by 9.9 million bbl for the week ended June 22 to 416.6 million bbl (OGJ Online, June 27, 2018). The Wall Street Journal said analysts surveyed before the report’s release had expected 2.8 million bbl.
Of the surprise decline, Commerzbank analysts said, “The key reason for this was record-high crude oil processing and a marked rise in US crude oil exports.”
EIA’s Petroleum Status Report said US production held at 10.9 million b/d. Gains in weekly production across the Lower 48 were offset by declines in Alaska production so that the total remained the same for the week ended June 22 as it was for June 15.
Energy prices
The August light, sweet crude contract on the New York Mercantile Exchange gained $2.23 to settle at $72.76/bbl on June 27. The August price was up $1.98 to $71.26/bbl.
The NYMEX natural gas price for July increased nearly 6¢ to a rounded $3/MMbtu. The Henry Hub cash gas price gained 7¢ to $3/MMbtu on June 27.
Ultralow-sulfur diesel for July increased nearly 5¢ to a rounded $2.17/gal. The NYMEX reformulated gasoline blendstock for July gained almost 6¢ to a rounded $2.13/gal.
Brent crude oil for August climbed $1.31 to $77.62/bbl on London’s International Commodity Exchange. The September contract increased $1.32 to $77.46/bbl. The OPEC Secretariat offices will be closed June 29 and July 2. The gas oil contract for July was $666/tonne, up $22.25.
OPEC’s basket of crudes averaged $74.31/bbl on June 27, up $1.62¢.
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.