Crude oil prices bounced up on both New York and London markets on Aug. 25, gaining more than $1/bbl for US light, sweet crude while Brent crude oil prices gained about 50¢ on the same day that the People’s Bank of China announced it cut interest rates for the fifth time since November 2014.
“Anything the (Chinese) government does that is viewed as credible will help the market,” said Amrita Sen, Energy Aspects analyst.
Concerns about China’s economy and its oil demand were blamed by many analysts for triggering a recent dip in world oil prices seen as inconsistent with market fundamentals (OGJ Online, Aug. 24, 2015).
Paul Horsnell, Standard Chartered director of global commodities, said, “If anything, sentiment appears to be more negative now than it was in [late] 2008.”
Plunging oil prices renewed calls from at least a couple countries for a special meeting of the Organization of Petroleum Exporting Countries. Representatives from Algeria and Iran have both suggested OPEC needs to discuss cutting the cartel’s production quota.
No official comment was immediately available from Saudi Arabia although an unidentified Saudi industry spokesman told the Wall Street Journal that an OPEC quota cut was unlikely.
EIA reports inventory
US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased 5.5 million bbl for the week ended Aug. 21 to a total of 450.8 million bbl, the Energy Information Administration said in its weekly Petroleum Status Report.
The drop was opposite what analysts surveyed by the WSJ had expected. Ten analysts surveyed by WSJ said they expected the weekly inventory would increase an average 300,000 bbl.
Total motor gasoline inventories increased 1.7 million bbl, which EIA called the middle of the average range. Both finished gasoline inventories and blending components inventories increased last week.
Distillate fuel inventories increased 1.4 million bbl, and EIA called that level the middle of the average range for this time of year. Propane-propylene inventories rose 1.9 million bbl and were described as being well above the upper limit of the average range.
US crude refinery inputs averaged 16.7 million b/d during the week ended Aug. 21, which was 117,000 b/d less than the previous week’s average. Refineries operated at 94.5% of operable capacity last week.
Gasoline production decreased slightly last week, averaging 9.8 million b/d. Distillate fuel production decreased last week, averaging 4.9 million b/d.
US crude oil imports averaged 7.2 million b/d, down 839,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.5 million b/d, 1.7% below the same 4-week period last year. Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 630,000 b/d. Distillate fuel imports averaged 123,000 b/d last week.
The natural gas contract for September was up 3.5¢ to $2.68/MMbtu. The Henry Hub, La., gas price gained 6¢ to $2.70/MMbtu.
Heating oil for September delivery edged up less than a penny to remain at a rounded $1.39/gal. The price for reformulated gasoline stock for oxygenates blending for September was down 3¢ to a rounded $1.44/gal.
The October ICE contract for Brent crude climbed 52¢ to $43.21/bbl, and the November contract added 57¢ to $44.06/bbl. The ICE gas oil contract for September gained $1.75 to $430.25/tonne.
The average price for the OPEC basket of 12 benchmark crudes declined to $40.47 on Aug. 25, down 20¢.
Contact Paula Dittrick at firstname.lastname@example.org.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.