MARKET WATCH: NYMEX crude oil prices fall for fourth consecutive day

Light, sweet crude oil prices for January delivery fell for the fourth consecutive day Dec. 9 on the New York market as investors and analysts grow increasingly convinced that a world oil oversupply will remain well into 2016.

Meanwhile, oil prices continued to drop even as a weekly report showed an unexpected decline in US oil supplies. But product supplies increased. Analysts especially noted a large build in distillates, which drove diesel prices down, and oil prices followed that direction.

The Energy Information Administration estimated US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 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.

US natural gas futures traded flat Dec. 9 awaiting the Dec. 10 release of EIA’s weekly Natural Gas Storage Report for gas in underground storage across the Lower 48.

EIA estimated working gas in storage was 3.88 tcf as of Dec. 4, which was a net decline of 76 bcf from the previous week. Stocks were 514 bcf higher than last year at this time and 236 bcf above the 5-year average of 3.64 tcf. At 3.88 tcf total, the working gas level is above the 5-year historical range, EIA said.

Weather forecasts suggest warmer-than-normal temperatures for this time of year for much of the nation during the next 2 weeks, which could discourage gas demand for heating. But forecasters note the second half of the winter could be colder than usual, which could benefit gas demand and prices.

Energy prices

The January crude oil contract on the New York Mercantile Exchange dropped 35¢ to settle Dec. 9 at $37.16/bbl. The February contract was down 29¢ to settle at $38.72/bbl.

The NYMEX natural gas contract for January was down a fraction of a penny to a rounded $2.06/MMbtu. The Henry Hub gas price was $2/MMbtu on Dec. 9, up 2¢.

Heating oil for January delivery dropped 2¢ to a rounded $1.24/gal. The price for reformulated gasoline stock for oxygenates blending for January was up 2.8¢ to a rounded $1.23/gal.

The January ICE contract for Brent crude dropped 15¢ to $40.11/bbl, and the February contract was down 25¢ to $40.34/bbl. The ICE gas oil contract for January was $373/tonne on Dec. 9 after the December gas oil contract expired Dec. 8, ending at $368.25/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Dec. 9 was $34.80/bbl, down 50¢.

Contact Paula Dittrick at

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

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