MARKET WATCH: NYMEX, Brent oil prices fall on US crude inventory build

Crude oil prices slumped on the New York and London markets Nov. 4 following a higher-than-expected build in US crude oil and product supplies, but prices showed signs of recovery before the close of Nov. 5 trading.

The US Energy Information Administration estimated commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 2.8 million bbl for the week ended Oct. 30 compared with the previous week (OGJ Online, Nov. 4, 2015).

In a survey compiled before release of the inventory report, analysts had told the Wall Street Journal that they expected a build of 2.4 million bbl. The US oil inventory has built for 6 consecutive weeks.

Regarding US economic news, the US trade deficit narrowed in September from August to $40.81 billion, which was the biggest change since early 2014. US imports of all types fell 1.8%, the Department of Commerce reported. Analysts suggested the decline in imports during September was partly due to lower crude oil prices.

Imports of industrial supplies, including oil, fell to the lowest level since August 2009 while petroleum imports alone fell to an 11-year low, DOC said.

On international oil markets, Russia reported Nov. 5 that its oil production in October reached 10.78 million b/d.

Reuters reported it obtained a draft of an internal long-term strategy report from the Organization of Petroleum Exporting Countries showing that the cartel expects world demand for OPEC crude oil will remain under pressure for the next few years. OPEC oil ministers are scheduled to meet in Vienna on Dec. 4.

Petromatrix analyst Olivier Jakob said, “For me, [Brent crude] is still really in a range. Each time it goes up $2, people get a bit excited, but then it goes back down $2. Technically, there is no trend.”

Energy prices

The December crude oil contracts on the New York Mercantile Exchange dropped $1.58 on Nov. 4 to $46.32/bbl. The January crude oil contract was down $1.59 to $47.21/bbl.

The NYMEX natural gas contract for December edged up less than a penny to a rounded $2.26/MMbtu. The Henry Hub, La., gas price climbed by 12¢ to $2.02/MMbtu.

Heating oil for December delivery declined 6¢ to a rounded $1.50/gal. The price for reformulated gasoline stock for oxygenates blending for December decreased 5¢ to a rounded $1.39/gal.

The December ICE contract for Brent crude was down $1.96 to $48.58/bbl. The January contract dipped $1.98 to $49.36/bbl.

The average price for the OPEC basket of 12 benchmark crudes for Nov. 4 was $44.83/bbl, up 54¢ after OPEC revised its basket numbers for both Nov. 2 and Nov. 3.

Contact Paula Dittrick at

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

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