MARKET WATCH: NYMEX crude oil prices approach $40/bbl

The crude oil price on the New York market for December delivery closed at $40.67/bbl on Nov. 17, triggering some analysts to comment about what might happen if the light, sweet crude oil benchmark were to fall through the $40/bbl mark again this year.

Prices could tumble to multiyear lows, said Ritterbush & Associates in a research note. Analysts said they based that upon sluggish economic news from China, Europe, and Japan.

“We expect [light, sweet crude] to continue to work its way down to the late August lows of $37.75[/bbl] possibly by next week,” Ritterbusch & Associates said.

A weekly government report released Nov. 18 showed oil inventories climbed again but less than what analysts had expected.

The US Energy Information Administration estimated commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 300,000 bbl for the week ended Nov. 13 from the previous week.

The total was 487.3 million bbl, the Petroleum Status Report said. Analysts surveyed by the Wall Street Journal had expected supplies to rise by 2 million bbl for the week ended Nov. 13. Separately, the American Petroleum Institute said its own estimate showed US crude oil inventories fell by 482,000 bbl.

Gasoline inventory up

Total motor gasoline inventories increased 1 million bbl, which EIA said was well above the upper limit of the average range. Finished gasoline inventories increased while blending components inventories remained unchanged last week.

Distillate fuel inventories decreased 800,000 bbl, which was the middle of the average range for this time of year. Propane-propylene inventories rose 500,000 bbl last week and are well above the upper limit of the average range.

US refinery inputs averaged 16.1 million b/d during the week ended Nov. 13, which was 137,000 b/d more than the previous week’s average. Refineries operated at 90.3% of capacity.

Gasoline production decreased, averaging about 9.6 million b/d. Distillate fuel production increased last week, averaging over 5 million b/d.

US crude oil imports averaged about 7 million b/d last week, down by 409,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.1 million b/d, 0.1% above the same 4-week period last year.

Energy prices

The December crude oil contract on the New York Mercantile Exchange dropped $1.07 on Nov. 17 to $40.67/bbl. The January crude oil contract was down $1.08 to $41.71/bbl.

The NYMEX natural gas contract for December was down 1.4¢ to a rounded $2.37/MMbtu. The Henry Hub gas price was down 9¢ at $2.05/MMbtu.

Heating oil for December delivery declined by 1.7¢ to a rounded $1.37/gal. The price for reformulated gasoline stock for oxygenates blending for December dropped a fraction of a penny to remain at a rounded $1.24/gal.

The January ICE contract for Brent crude decreased 99¢ to $43.57/bbl. The February contract was down by $1.01 to $44.44/bbl. The ICE gas oil contract for December closed at $423.25/tonne, up $8.25.

The average price for the OPEC basket of 12 benchmark crudes for Nov. 17 was $38.29/bbl, up 11¢.

Contact Paula Dittrick at

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

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