MARKET WATCH: NYMEX oil prices climb above $61/bbl

US light, sweet crude oil prices for July and August delivery both climbed more than $1/bbl during June 2 trading on the New York market to settle above $61/bbl pending the government’s weekly oil and products inventory report, which showed a decrease.

US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, declined 1.9 million bbl for the week ended May 29 compared with the previous week.

The US Energy Information Administration estimated the current inventory at 477.4 million bbl as of May 29. Crude inventories remain near levels not seen for this time of year in at least 80 years, the agency said in its Petroleum Status Report.

World oil traders await a June 5 meeting of members of the Organization of Petroleum Exporting Countries in Vienna. Many analysts expect the cartel will maintain its production quota of 30 million b/d. A few analysts suggest OPEC members might raise the quota slightly to match estimated production.

ABN Amro analyst Hans van Cleef said June 3 that it’s possible OPEC could raise its quota, adding the cartel’s production is above 30 million b/d. A Petromatrix analyst also previously said the cartel might raise its quota (OGJ Online, June 2, 2015).

“In terms of the global trends of energy outlook, the future looks very positive. The global economy is growing,” Saudi Oil Minister Ali al-Naimi told an OPEC seminar in Vienna.

He spoke along with OPEC ministers from Qatar and the UAE on June 3. Chief executive officers representing various oil and gas companies and other market observers also attended the OPEC seminar.

Bhushan Bahree, senior director of IHS Energy, noted, “Surprises from OPEC can never be ruled out,” but he expects the cartel will maintain its existing strategy.

US oil inventory

Total US motor gasoline inventories decreased 300,000 bbl for the week ended May 29, and EIA said gasoline levels are above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week.

Distillate fuel inventories increased 3.8 million bbl, which was the middle of the average range for this time of year. Propane-propylene inventories rose 3.8 million bbl and are well above the upper limit of the average range.

Refinery inputs averaged 16.4 million b/d for the week ended May 29, which was down 43,000 b/d for the week compared with the previous week. Refineries operated at 93.2% of capacity last week. Gasoline production decreased last week, averaging 9.4 million b/d. Distillate fuel production increased last week, averaging more than 5 million b/d.

US crude oil imports averaged nearly 7.4 million b/d last week, up 677,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged more than 7 million b/d, 1.3% below the same 4-week period last year.

Total motor gasoline imports, including finished gasoline and gasoline blending components, last week averaged 692,000 b/d. Distillate fuel imports averaged 64,000 b/d last week.

Energy prices

The July crude oil contract on the New York Mercantile Exchange gained $1.06 on June 2 to settle at $61.26/bbl. The August contract climbed $1.04 to settle at $61.52/bbl.

The natural gas contract for July gained nearly 5¢ to a rounded $2.70/MMbtu. The Henry Hub, La., gas price added 2¢ to $2.62/MMbtu.

Heating oil for July was up 1.9¢ to a rounded $1.95/gal. The price for reformulated gasoline stock for oxygenates blending for July rebounded by 2¢ to a rounded $2.06/gal.

The July ICE contract for Brent crude gained 61¢ to $65.49/bbl while the August contract climbed 69¢ to $66.20/bbl. The ICE gas oil contract for June was up $6.25 to $596/tonne.

The average price for OPEC’s basket of 12 benchmark crudes for June 2 was $62.32/bbl, up $1.80.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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