MARKET WATCH: NYMEX crude oil prices drop in advance of weekly inventory

US light, sweet crude oil prices for October dropped $1.79/bbl on the New York market Sept. 9 awaiting the weekly US government report on oil and product inventories, which came out a day later than normal because of the Labor Day holiday on Sept. 7.

The US Energy Information Administration estimated commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased 2.6 million bbl for the week ended Sept. 4 from the previous week. The latest total was 458 million bbl, the Petroleum Status Report said.

Analysts surveyed by The Wall Street Journal had expected inventories to increase by only 1 million bbl for the week.

A separate EIA report issued Sept. 9 said US oil production fell to nearly a 1-year low in August and was expected to continue falling well into 2016.

Societe Generale of Paris cut its Brent price forecast by $10 to $47.50/bbl for the fourth quarter and by $5.65 to $54.40/bbl for 2016. It also cut its US light, sweet oil price forecast by $10 to $42.50/bbl for the fourth quarter and by $5.65 to $49.40/bbl for 2016.

A research report from Societe Generale said concerns about China’s struggling economy and an anticipated US interest rate hike have contributed to lower commodity demand and lower oil prices.

Gasoline inventory grows

Total motor gasoline inventories increased 400,000 bbl for the week ended Sept. 4, which EIA called the middle of the average range. Finished gasoline inventories increased while blending component inventories decreased last week.

Distillate fuel inventories increased 1 million bbl last week, and EIA said that level was in the middle of the average range for this time of year. Propane-propylene inventories rose 200,000 bbl last week and are well above the upper limit of the average range.

US refinery inputs averaged more than 16.1 million b/d during the week ended Sept. 4, which was 279,000 b/d less than the previous week’s average. Refineries operated at 90.9% capacity.

Gasoline production decreased, averaging 9.6 million b/d. Distillate fuel production decreased last week, averaging 4.8 million b/d.

US crude oil imports averaged about 7.5 million b/d, down by 396,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged over 7.6 million b/d, which EIA described as being 0.5% above the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 589,000 b/d, and distillate fuel imports averaged 130,000 b/d.

Energy prices

The October crude oil contract on the New York Mercantile Exchange dropped $1.79 to $44.15/bbl on Sept. 9 while the November crude oil contract was down $1.79 to $44.80/bbl.

The natural gas contract for October declined nearly 6¢ to a rounded $2.65/MMbtu. The Henry Hub, La., gas price held unchanged at $2.73 on Sept. 9.

Heating oil for October delivery dropped by 5.5¢ to a rounded $1.54/gal. The price for reformulated gasoline stock for oxygenates blending for October was down 4¢ to a rounded $1.36/gal.

The October ICE contract for Brent crude dropped $1.94 to $47.58/bbl, and the November contract was down $1.89 to $48.52/bbl. The ICE gas oil contract for September decreased $8.50 to $472.50/tonne.

The average price for the OPEC basket of 12 benchmark crudes gained 58¢ to $45.96/bbl on Sept. 9.

Contact Paula Dittrick at

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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