US light, sweet crude oil prices settled slightly lower on the New York market July 8 for the fifth consecutive trading session, and analysts attributed the drop to an unexpected rise in US crude oil supplies along with uncertainty about Iran’s continuing talks concerning its nuclear program.
The closing price for oil on the New York Mercantile Exchange for August delivery was less than $52/bbl after the US Energy Information Administration estimated commercial crude oil inventories increased 400,000 bbl to 465.8 million bbl, the weekly Petroleum Status Report said.
The inventory climb surprised analysts who had told the Wall Street Journal in an earlier survey that they expected supplies would fall 1 million bbl for the week ended July 3.
On July 9, EIA issued its weekly Gas Storage Report, estimating natural gas in underground storage across the Lower 48 at a rounded 2.67 tcf as of July 3, which was a net increase of 91 bcf from the previous week. Stocks were 659 bcf higher than last year at this time and 45 bcf above the 5-year average of 2.62 tcf.
On international oil markets, analysts cited slowing crude oil imports from China as a negative sign for global oil demand. Greece’s bailout crisis also fueled negative sentiments, with some market observers saying that could trigger a slowdown in European crude oil demand.
Regarding Iran’s efforts to reach a nuclear deal with international leaders, Goldman Sachs analysts suggest it will be awhile before any deal is struck. The next deadline is July 10. An accord could result in a lifting of sanctions and the eventual return of Iranian oil to an already oversupplied world oil market.
The August crude oil contract on NYMEX dropped 68¢ on July 8 to $51.65/bbl. The September contract dropped 62¢ to $52.09/bbl.
The natural gas contract for August was down 3¢ to a rounded $2.69/MMbtu. The Henry Hub, La., gas price was $2.71/MMbtu on July 8, down 2¢.
Heating oil for August edged up less than a penny to remain at a rounded $1.71. The price for reformulated gasoline stock for oxygenates blending for August rose nearly 5¢ to a rounded $2/gal.
The August ICE contract for Brent crude gained 20¢ to $57.05/bbl on July 8, while the September contract climbed 3¢ to $57.39/bbl. The ICE gas oil contract for July was up $6.25 to $524.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 8 was $53.76/bbl, down 47¢.
Contact Paula Dittrick at email@example.com.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.