MARKET WATCH: Oil prices decline as crude inventories post first gain in 9 weeks

Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crude inventories in 9 weeks.

The US Energy Information Administration said in its Weekly Petroleum Status Report that commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 2.4 million bbl for the week ended June 26 compared with the previous week (OGJ Online, June 24, 2015).

The Wall Street Journal indicated that analysts had anticipated the rise. At 465.4 million bbl, US crude oil inventories remain near levels not seen for this time of year in at least the last 80 years, EIA said.

US refinery inputs during the week averaged more than 16.5 million b/d, 1,000 b/d fewer than the previous week’s average. Refineries operated at 95% of their operable capacity.

Gasoline production increased, averaging more than 10 million b/d. Distillate fuel production also increased, averaging more than 5 million b/d.

Total motor gasoline inventories decreased 1.8 million bbl and are in the upper half of the average range. Both finished gasoline inventories and blending components inventories decreased last week.

Distillate fuel inventories increased 400,000 bbl and are in the middle of the average range for this time of year. Propane-propylene inventories rose 1.6 million bbl and are well above the upper limit of the average range, EIA said.

US crude oil imports averaged more than 7.5 million b/d last week, up 748,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7 million b/d, 3.5% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, averaged 760,000 b/d. Distillate fuel imports averaged 173,000 b/d.

Energy prices

The August crude oil contract on the New York Mercantile Exchange rose $1.14 on June 30 to $59.47/bbl. The September contract gained $1.15 to $59.83/bbl.

The natural gas contract for August was up 2.7¢ to a rounded $2.83/MMbtu. The Henry Hub, La., gas price was $2.77/MMbtu, down 3¢.

Heating oil for July increased 5¢ to a rounded $1.89/gal. The price for reformulated gasoline stock for oxygenates blending for July gained 5.9¢ to a rounded $2.09/gal.

The August ICE contract for Brent crude increased $1.58 to $63.59/bbl, while the September contract increased $1.54 to $64.14/bbl. The ICE gas oil contract for July rose $9.25 to $573.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for June 30 was $58.79/bbl, up 55¢.

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