The light, sweet crude oil contract for September delivery settled at $43.87/bbl on the New York market Aug. 7, putting it close to 2015 lows experienced during March, which analysts attributed to a higher US gasoline inventory and world crude market oversupply concerns.
The US Energy Information Administration reported gasoline inventories rose by 811,000 bbl for the week ended July 31 (OGJ Online, Aug. 5, 2015). Analysts said that jump indicates reduced retail demand because the summer driving season is ending.
Meanwhile, seasonal refinery maintenance is starting, which also slows demand and could put downward pressure on oil prices, analysts said.
Barclays analysts issued a weekly research note entitled “Trending Water” on Aug. 10 saying many US companies met or exceeded production forecasts for the second quarter, and some companies expect continued growth during the second half despite lower near-term prices.
“We forecast production will decline in Q3 before rebounding slightly in Q4,” said Michael Cohen in Barclays New York office. “In the event that output exceeds our expectations, in certain months WTI-Brent could average more than our quarterly forecast (-$6 Q3 and -$3 Q4).”
As of Aug. 7, the Brent contract for September delivery traded at $4.74/bbl higher than the light, sweet crude oil contract for the same month.
The September crude oil contract on the New York Mercantile Exchange dropped 79¢ on Aug. 7 to settle at $43.87/bbl. The October contract was down 73¢ to $44.36/bbl.
The natural gas contract for September was down 1.5¢ to a rounded $2.80/MMbtu. The Henry Hub, La., gas price rose 4¢ to $2.80/MMbtu.
Heating oil for September delivery fell 6¢ to a rounded $1.54/gal. The price for reformulated gasoline stock for oxygenates blending for September dropped 2.5¢ to a rounded $1.62/gal.
The September ICE contract for Brent crude dipped 91¢ to $48.61/bbl on Aug. 7. The October contract was down 85¢ to $49.24/bbl. The ICE gas oil contract for September was up $2.50 to $470.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Aug. 7 was $46.95, down 15¢.
Contact Paula Dittrick at firstname.lastname@example.org.
*Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.