Light, sweet crude oil prices for November delivery dropped on the New York market to close slightly lower Oct. 15 following a larger-than-expected jump in crude oil and product supplies, and analysts said the increase was an affirmation that ample global oil supplies continue.
The Energy Information Administration reported US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased by 7.6 million bbl for the week ended Oct. 9 compared with the previous week.
The latest estimated total was 468.6 million bbl, the Petroleum Status Report showed.
Regarding natural gas in underground storage across the Lower 48, EIA estimated levels at 3.7 tcf as of Oct. 9, which was a net increase of 100 bcf from the previous week. Stocks were 447 bcf higher than last year at this time and 168 bcf above the 5-year average of 3.56 tcf, the Gas Storage Report said.
J. Marshall Adkins of Raymond James & Associates in Houston forecast that the government next week will report an 88 bcf gas injection for the week ending Oct. 16.
“We continue to stand by our view that the market is structurally oversupplied and will continue to require aggressive coal-to-gas switching throughout the remainder of 2015, incentivized by low gas prices, to avoid closing in on maximum storage capacity,” Adkins said in an Oct. 16 research note.
“As such, we expect natural gas prices to remain depressed through the end of the year,” he added.
The natural gas contract for November declined by 6.5¢ to a rounded $2.45/MMbtu. The Henry Hub, La., gas price was up 5¢ to $2.49/MMbtu.
Heating oil for November delivery was up less than a penny to a rounded $1.49/gal. The price for reformulated gasoline stock for oxygenates blending for November was down less a fraction of a penny to remain at a rounded $1.31/gal.
The November ICE contract for Brent crude dropped 44¢ to $48.71/bbl, and the December contract rose 4¢ to $49.73/bbl. ICE gas oil for November settled at $449.50/tonne, down $4.25.
The average price for the OPEC basket of 12 benchmark crudes was $45.05 on Oct. 15, down 16¢.
Contact Paula Dittrick at firstname.lastname@example.org.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.