MARKET WATCH: NYMEX, Brent crude oil prices stabilize after steep drops

Brent crude oil prices dipped below $40/bbl before closing at $40.26/bbl on the London market Dec. 8 in a volatile trading session while light, sweet crude oil prices settled under $38/bbl on the New York market.

Recently, both Brent and US light, sweet crude contracts have dropped steeply to trade at lows last experienced in February 2009. Analysts noted on Dec. 9 that US crude oil contracts appeared to have stabilized somewhat pending release of a weekly government inventory report.

The Energy Information Administration estimated US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased 3.6 million bbl for the week ended Dec. 4 compared with the previous week. The latest current total was 485.9 million bbl, the Petroleum Status Report said.

Analysts surveyed by the Wall Street Journal in advance of the report said they expected another increase in oil supplies. The American Petroleum Institute said its own survey for last week showed US crude stockpiles fell 1.9 million bbl.

Regarding next year’s outlook, EIA reduced its oil price forecast, saying US light, sweet prices are expected to average $50.89/bbl during 2016 compared with its previous 2016 forecast of $51.31/bbl.

Separately, WSJ reported that crude oil on the New York futures market has averaged $49.60/bbl so far this year.

Gasoline supply climb

Total US motor gasoline inventories increased 800,000 bbl for the week ended Dec. 4, and EIA said gasoline supplies were in the upper half of the average range. Finished gasoline inventories decreased while blending components inventories increased.

Distillate fuel inventories increased 5 million bbl last week and are in the upper half of the average range for this time of year. Propane-propylene inventories fell 3.4 million bbl but are well above the upper limit of the average range.

US refinery inputs averaged about 16.7 million b/d for the week ended Dec. 4, which was 151,000 b/d less than the previous week’s average. Refineries operated at 93.1% of capacity last week.

Gasoline production increased, averaging about 9.9 million b/d. Distillate fuel production increased last week, averaging over 5.2 million b/d.

US crude oil imports averaged more than 8 million b/d, up 274,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged more than 7.5 million b/d, remaining unchanged from the same 4-week period last year.

Total motor gasoline imports, including finished gasoline and gasoline blending components, last week averaged 648,000 b/d. Distillate fuel imports averaged 58,000 b/d.

Energy prices

The January crude oil contract on the New York Mercantile Exchange declined 14¢ to settle Dec. 8 at $37.51/bbl. The February contract was down 29¢ to settle at $39.01/bbl.

The NYMEX natural gas contract for January edged up less than a penny to remain at a rounded $2.07/MMbtu. The Henry Hub gas price was $1.98/MMbtu on Dec. 8, down 5¢.

Heating oil for January delivery dropped 2¢ to a rounded $1.26/gal. The price for reformulated gasoline stock for oxygenates blending for January was down less than 1¢ to a rounded $1.20/gal.

The January ICE contract for Brent crude dropped 47¢ to $40.26/bbl, and the February contract was down 60¢ to $40.59/bbl. The ICE gas oil contract for December closed at $368.25/tonne on Dec. 8, down $5.25.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Dec. 8 was $35.30/bbl, down $1.15.

Contact Paula Dittrick at

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

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