Light, sweet crude oil prices settled higher on the New York market July 14 following overnight news that Iran reached a tentative agreement with international powers regarding its nuclear program, although that agreement has yet to be officially approved.
Negotiators for the US, European Union, and United Nations agreed to lift economic sanctions against Iran’s energy and financial businesses imposed since 2012 in exchange for Iran accepting limits on its nuclear activities for 10 years.
The next 2 months, however, will prove crucial to the accord’s fate because the agreement still hinges on US congressional approval. Also, the deal’s terms have already been criticized by Israel, a US ally.
Oil analysts note the tentative agreement means no additional oil is coming on the market immediately although Iran reportedly has oil stored on tankers.
Congress has 60 days from the time it receives documents from the negotiations in Vienna to review the agreement and then will decide whether to vote on approving or disapproving of the deal. Under a law passed earlier this year, congressional disapproval would stop US President Barack Obama from lifting sanctions against Iran.
Separately on July 15, the Energy Information Administration estimated US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased 4.3 million bbl for the week ended July 10 from the previous week. The latest total was 461.4 million bbl, the weekly Petroleum Status Report said.
Gasoline inventories climb
Total motor gasoline inventories increased 100,000 bbl last week, and EIA said that level was in the upper half of the average range. Finished gasoline inventories decreased while blending components inventories increased.
Distillate fuel inventories increased 3.8 million bbl, and that level was in the middle of the average range for this time of year. Propane-propylene inventories rose 1.7 million bbl, and that inventory was well above the upper limit of the average range.
Total commercial petroleum inventories increased 2.8 million bbl for the week ended July 10, EIA said. Total products supplied over the latest 4-week period averaged 19.9 million b/d, up 3.6% from the same period last year.
During 4 weeks, motor gasoline product supplied averaged 9.6 million b/d, up 6.5% from the same period last year. Distillate fuel product supplied averaged 3.7 million b/d during 4 weeks, down 2.3% from the same period last year.
US refinery inputs averaged more than 16.8 million b/d, which was 229,000 b/d more than the previous week’s average. Refineries operated at 95.3% of capacity.
Gasoline production decreased last week, averaging 9.7 million b/d. Distillate fuel production increased slightly last week, averaging 5.1 million b/d.
US crude oil imports averaged 7.4 million b/d, up 38,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged more than 7.2 million b/d, which was 1.3% below the same 4-week period last year.
Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 682,000 b/d. Distillate fuel imports averaged 146,000 b/d.
The natural gas contract for August was down 2¢ to a rounded $2.84/MMbtu. The Henry Hub, La., gas price was $2.95/MMbtu, up 7¢.
Heating oil for August rose less than a penny to remain at a rounded $1.72. The price for reformulated gasoline stock for oxygenates blending for August fell nearly 1¢ to a rounded $1.93/gal.
The August ICE contract for Brent crude increased 66¢ to $58.51/bbl on July 14, while the September contract was up 53¢ to $58.68/bbl. The ICE gas oil contract for August fell $7.50 to $529.25/tonne.
The average price for OPEC’s basket of 12 benchmark crudes for July 14 was $54.55/bbl, down 68¢.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.