MARKET WATCH: NYMEX crude oil prices drop modestly awaiting inventory

Light, sweet crude oil prices for November delivery dropped modestly Oct. 20 on the New York market pending release of the weekly US government inventory on oil and products and as analysts awaited news reports from a meeting in Vienna among some of the world’s top oil producers.

The US Energy Information Administration estimated commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 8 million bbl for the week ended Oct. 16 from the previous week. The latest estimated total was 476.6 million bbl, the Petroleum Status Report said.

Analysts surveyed by the Wall Street Journal in advance of the report had forecast an increase of 3.5 million bbl. The American Petroleum Institute estimated inventories rose by 7.1 million bbl.

Before the report was issued, Ole Hansen, Saxo Bank head of commodity strategy, said, “A larger-than-expected inventory could post a significant downside risk for current oil price forecasts.”

Separately, members of the Organization of Petroleum Exporting Countries were scheduled to meet in Vienna with some non-OPEEC members on Oct. 21. Analysts doubted any significant news would come from the technical meeting.

US gasoline supplies drop

Total motor gasoline inventories decreased by 1.5 million bbl for the week ended Oct. 16, which EIA said was above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories decreased last week.

Distillate fuel inventories decreased by 2.6 million bbl last week but are in the middle of the average range for this time of year. Propane-propylene inventories fell 600,000 bbl but are well above the upper limit of the average range, EIA said.

Refinery inputs averaged over 15.3 million b/d for the week ended Oct. 16, which was 78,000 b/d more than the previous week’s average. Refineries operated at 86.4% of capacity last week.

Gasoline production decreased, averaging 9.6 million b/d. Distillate fuel production increased last week, averaging over 4.7 million b/d.

US crude oil imports averaged 7.5 million b/d, up by 156,000 b/d for the week ended Oct. 16 from the previous week. Over the last 4 weeks, crude oil imports averaged about 7.4 million b/d, 2.7% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 709,000 b/d. Distillate fuel imports averaged 58,000 b/d.

Energy prices

The November crude oil contract on the New York Mercantile Exchange declined 34¢ to $45.55/bbl on Oct. 20 while the December crude oil contract rose by 1¢ to $46.29/bbl.

The natural gas contract for November increased 3.4¢ to a rounded $2.48/MMbtu. The Henry Hub, La., gas price rose 3¢ to $2.45/MMbtu.

Heating oil for November delivery was down a fraction of a penny to remain at a rounded $1.45/gal. The price for reformulated gasoline stock for oxygenates blending for November gained a rounded 3¢ to a rounded $1.28/gal.

The December ICE contract for Brent crude increased 10¢ to $48.71/bbl, and the January contract gained 9¢ to $49.40/bbl. ICE gas oil for November settled at $442.75/tonne, down $4.25.

The average price for the OPEC basket of 12 benchmark crudes was $43.87/bbl on Oct. 20, down $1.05.

Contact Paula Dittrick at

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

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