MARKET WATCH: EIA, OPEC reports weigh down oil prices

Crude oil prices on the New York and London markets fell on Nov. 11 and continued their declines on Nov. 12 on reports from the US Energy Information Administration and Organization of Petroleum Exporting Countries indicating a persistently oversupplied oil market.

US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased 4.2 million bbl to 487 million bbl during the week ended Nov. 6 compared with the previous week, according to EIA’s latest report.

Analysts surveyed by The Wall Street Journal expected inventories to increase 1.1 million bbl, while the American Petroleum Institute projected an increase of 6.3 million bbl.

Total motor gasoline inventories fell 2.1 million bbl last week, but are well above the upper limit of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories increased 400,000 bbl and are in the middle of the average range for this time of year.

Propane-propylene inventories rose 1.6 million bbl and are well-above the upper limit of the average range. Total commercial petroleum inventories increased 2.6 million bbl.

Total products supplied over the last 4-week period averaged about 19.8 million b/d, up 1.2% from the same period last year. Over the last 4 weeks, motor gasoline product supplied averaged 9.3 million b/d, up 3.4% from the same period last year.

Distillate fuel product supplied averaged 4 million b/d over the last 4 weeks, up 8.3% from the same period last year. Jet fuel product supplied is up 4% compared with the same 4-week period last year.

US crude oil refinery inputs during the week ended Nov. 6 averaged more than 15.9 million b/d, which was 302,000 b/d more than the previous week’s average. Refineries operated at 89.5% of their operable capacity last week. Gasoline production increased last week, averaging 9.7 million b/d. Distillate fuel production decreased slightly, averaging 4.9 million b/d.

US crude oil imports averaged 7.4 million b/d, up 434,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.2 million b/d, 2.5% above the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 353,000 b/d. Distillate fuel imports averaged 136,000 b/d.

OPEC production down in October

In its Monthly Oil Market Report for November, OPEC projects non-OPEC oil supply to average 57.24 million b/d in 2015, an increase of 720,000 b/d, unchanged from the previous month’s estimation. The forecast for 2016 non-OPEC oil supply remains unchanged, showing a contraction of 130,000 b/d to average 57.11 million b/d.

According to secondary sources, OPEC production in October dropped 256,000 b/d to average 31.38 million b/d. Crude output decreased mostly in Iraq, Saudi Arabia, and Kuwait, while production in Libya showed an increase.

Commercial oil stocks from members of the Organization for Economic Cooperation and Development remained almost unchanged in September at 2.942 billion bbl, about 210 million bbl higher than the latest 5-year average, with crude and products indicating surpluses of around 170 million bbl and 40 million bbl, respectively. In terms of days of forward cover, OECD commercial stocks stood at 63 days in September, around 4.5 days above the 5-year average, OPEC says.

OPEC still sees world oil demand rising 1.5 million b/d in 2015 to average 92.86 million b/d, unchanged from the previous report. In 2016, it sees world oil demand growth reaching 1.25 million b/d—in line with the previous month’s assessment—to average 94.14 million b/d.

Estimated demand for OPEC crude in 2015 remains at 29.6 million b/d, an increase of 600,000 b/d over the previous year. In 2016, demand for OPEC crude is forecast at 30.8 million b/d, about 1.2 million b/d higher than in the current year and unchanged from the previous report.

Energy prices

The December crude oil contract on the New York Mercantile Exchange fell $1.28 on Nov. 11 to $42.93/bbl. The January crude oil contract fell $1.24 to $44.20/bbl.

The NYMEX natural gas contract for December dropped 5.7¢ to a rounded $2.26/MMbtu. The Henry Hub gas price was unchanged at $2.11/MMbtu.

Heating oil for December delivery lost 3.88¢ to a rounded $1.45/gal. The price for reformulated gasoline stock for oxygenates blending for December dropped 3.24¢ to a rounded $1.33/gal.

The December ICE contract for Brent crude declined $1.63 to $45.81/bbl. The January contract declined $1.49 to $46.61/bbl. The ICE gas oil contract for November closed at $439/tonne, down $10.75.

The average price for the OPEC basket of 12 benchmark crudes for Nov. 11 was $41.53/bbl, down 73¢.

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