MARKET WATCH: Crude oil prices moved by Brazilian supply concerns, US inventory report

Crude oil prices on the New York and London markets increased on Nov. 3 by more than $1 on concerns about Brazilian and Libyan supply disruptions. Some of those gains, however, were given up early on Nov. 4 as market observers awaited the US crude inventory report.

Brazil’s Oil Workers Federation (FUP)—the country’s largest oil workers union—began a strike on Nov. 1 protesting state-owned Petroleo Brasileiro SA’s (Petrobras) planned asset sales. The company has reported its intention to divest $15.1 billion for 2015-16, with $700 million in 2015 and $14.4 billion in 2016 (OGJ Online, Oct. 6, 2015).

In a statement released by Petrobras on the evening of Nov. 3, the company said the work stoppage resulted in an oil production decline of 273,000 bbl on Nov. 2, amounting to 13% of daily output in Brazil. The company estimated an 8.5% drop on Nov. 3.

In Libya, meanwhile, an export terminal on the eastern port of Zueitina was closed amid a force majeure.

The US Energy Information Administration reported that commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased 2.8 million bbl during the week ended Oct. 30 compared with the previous week. The total is now 482.8 million bbl. The rise is in line with analyst estimates.

Total motor gasoline inventories last week fell 3.3 million bbl, above the upper limit of the average range, EIA said. Both finished gasoline inventories and blending components inventories decreased.

Distillate fuel inventories dropped 1.3 million bbl, but are in the middle of the average range for this time of year. Propane-propylene inventories rose 800,000 bbl last week and are well-above the upper limit of the average range.

US crude refinery inputs during the week ended Oct. 30 averaged more than 15.6 million b/d, up 21,000 b/d from the previous week’s average. Refineries operated at 88.7% of their operable capacity last week.

Gasoline production decreased last week, averaging more than 9.5 million b/d. Distillate fuel production increased last week, averaging 4.9 million b/d.

US crude oil imports averaged more than 6.9 million b/d, down 89,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.2 million b/d, 0.8% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 307,000 b/d. Distillate fuel imports averaged 84,000 b/d.

Energy prices

The December and January crude oil contracts on the New York Mercantile Exchange each gained $1.76 on Nov. 3 to $47.90/bbl and $48.80/bbl, respectively.

The NYMEX natural gas contract for December fell less than a penny to a rounded $2.25/MMbtu. The Henry Hub, La., gas price dropped another 2¢ to $1.90/MMbtu.

Heating oil for December delivery climbed 5.91¢ to a rounded $1.57/gal. The price for reformulated gasoline stock for oxygenates blending for December increased 7.02¢ to a rounded $1.45/gal.

The December ICE contract for Brent crude gained $1.75 to $50.54/bbl. The January contract rose $1.73 to $51.34/bbl. ICE gas oil for November settled at $465.50/tonne, up $12.

The average price for the OPEC basket of 12 benchmark crudes for Nov. 3 was $43.94/bbl, down 7¢.

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