Oil markets remained volatile Mar. 24 while analysts anticipated a weekly government inventory report showing another climb in US oil and product supplies. US light, sweet crude prices edged up on Mar. 24 to remain under $48/bbl while Brent prices fell modestly to settle at above $55/bbl.
The Energy Information Administration reported US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, increased by 8.2 million bbl for the week ended Mar. 20 from the previous week.
At 466.7 million bbl, US crude oil inventories are at the highest level for this time of year in at least the last 80 years, the Petroleum Status Report said.
Internationally, Ukraine announced plans to temporarily stop buying natural gas from Russia on Apr. 1 when an interim gas supply deal expires, Ukraine’s Energy Minister Volodymyr Demchyshyn told reporters at a news briefing in Kiev earlier this week.
Ukraine can buy gas from Europe cheaper now, he said, adding that Ukraine and Russia are working toward finalizing a gas supply deal and expect to sign a contract by Apr. 14.
In October 2014, Ukraine and Russia signed a temporary deal to ensure Ukraine had enough gas to get through the heating season and to ensure uninterrupted transportation of Russian gas to the European Union members.
About half of the EU gas imported from Russia comes through a pipeline running across Ukraine.
US gasoline supplies drop
Total US motor gasoline inventories decreased by 2 million bbl for the week ended Mar. 20, but that level remains well above the upper limit of the average range, EIA said. Both finished gasoline inventories and blending components inventories decreased last week.
Distillate fuel inventories were unchanged last week and are in the lower half of the average range for this time of year. Propane-propylene inventories rose 700,000 bbl and are well above the upper limit of the average range.
US refinery inputs averaged over 15.5 million b/d, which was 94,000 b/d more than the previous week’s average. Refineries operated at 89% of capacity.
Gasoline production decreased last week, averaging more than 9 million b/d. Distillate fuel production decreased slightly last week, averaging over 4.7 million b/d, EIA said.
Crude oil imports averaged 7.4 million b/d last week, down by 104,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged about 7.3 million b/d, 1% below the same 4-week period last year.
Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 443,000 b/d. Distillate fuel imports averaged 348,000 b/d for the week ended Mar. 20.
The natural gas contract for April climbed 5¢ to a rounded $2.79/MMbtu. The Henry Hub, La., gas price was $2.78/MMbtu, up 9¢.
Heating oil for April delivery declined 2.4¢ to a rounded $1.71/gal. Reformulated gasoline stock for oxygenate blending for April mas down less than a penny to remain at a rounded $1.80/gal.
The May ICE contract for Brent crude oil was down 81¢, settling at $55.11/bbl. The June contract dropped 77¢ to $56.21/bbl. The ICE gas oil contract for April was down $4.50 to $523.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Mar. 24 was $50.92/bbl, up 62¢.
Contact Paula Dittrick at firstname.lastname@example.org.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.