MARKET WATCH: NYMEX crude oil prices top $60/bbl pending inventory report

Crude oil futures on the New York market settled above $60/bbl June 9 as traders and analysts correctly anticipated the US government’s weekly inventory crude and product report to show another decline in oil supplies.

The US Energy Information Administration estimated US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased 6.8 million bbl for the week ended June 5 compared with the previous week.

At 470.6 million bbl, crude oil inventories as of June 5 remained near levels not seen for this time of year in at least the last 80 years, EIA said.

Separately, the American Petroleum Institute reported US commercial crude stocks dropped 6.7 million bbl for the week.

Paul Horsnell, head of Standard Chartered commodities research, said a decline in unconventional drilling gradually is starting to show up in US production and inventory statistics. He expects total US shale oil production will be 5.15 million b/d in December, which would be 191,000 b/d lower than December 2014.

“Shale’s decline has been a long one, and we expect the recovery will also be a prolonged affair,” Horsnell said.

Gasoline

Total US motor gasoline inventories decreased 2.9 million bbl for the week ended June 5, but levels remained in the upper half of the average range, EIA said. Finished gasoline inventories increased while blending components inventories decreased last week.

Distillate fuel inventories increased 900,000 bbl last week and are in the middle of the average range for this time of year. Propane-propylene inventories rose 1.7 million bbl and are well above the upper limit of the average range.

US refinery inputs averaged 16.6 million b/d during the week ended June 5, which was 169,000 b/d more than the previous week’s average. Refineries operated at 94.6% of capacity.

Gasoline production increased last week, averaging 10 million b/d. Distillate fuel production increased last week, averaging 5.1 million b/d, EIA said.

US crude oil imports averaged more than 6.6 million b/d, down 750,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged about 7 million b/d, 2.3% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 666,000 b/d. Distillate fuel imports averaged 181,000 b/d, EIA said.

Energy prices

The July crude oil contract on the New York Mercantile Exchange soared $2 on June 9 to settle at $60.14/bbl. The August contract also climbed $2 to settle at $60.61/bbl.

The natural gas contract for July rose 14¢ to a rounded $2.85/MMbtu. The Henry Hub, La., gas price climbed 14¢ to $2.81/MMbtu.

Heating oil for July was up 6¢ to a rounded $1.92/gal. The price for reformulated gasoline stock for oxygenates blending for July climbed nearly 7¢ to a rounded $2.08/gal.

The July ICE contract for Brent crude escalated $2.19 to $64.88/bbl while the August contract rose $2.23 to $65.46/bbl. The ICE gas oil contract for June was up $15.75 to $587.50/tonne.

The average price for OPEC’s basket of 12 benchmark crudes for June 9 was $60.27/bbl, up 85¢.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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