Oil prices rose modestly on the New York market Dec. 3 after a weekly US petroleum inventory showed crude inventories fell by a surprising 3.7 million bbl, which analysts attributed to higher refinery processing rates.
The Energy Information Administration said in its weekly petroleum report that US crude oil refinery inputs averaged 16.4 million b/d during the week ended Nov. 28, marking a 399,000-b/d increase compared with the previous week’s average (OGJ Online, Dec. 3, 2014).
Meanwhile, Brent crude oil prices fell on the London market. The premium of Brent to US light, sweet crude oil narrowed to $2.54/bbl as of the Dec. 3 settlement prices for January contracts.
The Wall Street Journal reported Dec. 3 that an unnamed source said Saudi Arabia believes that Brent could stabilize at around $60/bbl.
“If prices drop…below $60[\bbl], it won’t be for a long time,” a Persian Gulf official told WSJ. The Organization of Petroleum Exporting Countries maintained its production quota for members during a Nov. 27 meeting in Vienna.
Regarding US natural gas supplies in underground storage, EIA estimated working gas in storage was 3.4 tcf as of Nov. 28, a net decline of 22 bcf from the previous week. Stocks were 227 bcf less than last year at this time and 372 bcf below the 5-year average of 3.78 tcf.
The weekly gas storage report followed a Nov. 25 “Today in Energy” report in which EIA said production from shale gas wells surpassed production from conventional gas wells in 2013.
“New technology has enabled producers to shift production to resources that are now easier to reach and have lower drilling costs,” EIA said.
The natural gas contract for January dropped nearly 7¢ to a rounded $3.80/MMbtu. The cash gas price at Henry Hub, La., was $3.63 on Dec. 3, down 12¢.
Heating oil for January delivery fell 2¢ to a rounded $2.13/gal. Reformulated gasoline stock for oxygenate blending for January edged down by less than a penny to remain at a rounded $1.81/gal.
The January 2015 ICE contract for Brent crude oil dropped 62¢ to $69.92/bbl. The February contract fell 52¢ to $70.41/bbl. The ICE gas oil contract for December dropped $7, settling at $634/tonne.
The average price for OPEC’s basket of 12 benchmark crudes on Dec. 3 was $67.31/bbl, down 82¢.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.