US light, sweet crude oil prices and Brent crude oil prices both plunged by more than $3.50/bbl for front-month delivery on the New York and London markets, which analysts attributed to robust US oil inventories and also reports of record Saudi oil production.
Oil inventories jumped last week according to US government statistics, triggering a steep drop in prices only the day after crude futures reached a 2015 high on the New York market (OGJ Online, Apr. 8, 2015).
But analysts expect oil inventories will begin to decline by late April and early May while refineries boost processing rates to meet seasonal gasoline demand, which increases when motorists drive for summer vacation trips.
“While we expect US oil supply to tighten later in 2015, the supply response will be milder and shorter-lived than previously thought,” ANZ Bank said.
Regarding natural gas in underground storage across the Lower 48, the US Energy Information Administration estimated working gas in storage at 1.476 tcf as of Apr. 3. That level marked a net increase of 15 bcf from the previous week.
Stocks were 651 bcf higher than last year at this time and 173 bcf below the 5-year average of 1.649 tcf, the weekly Natural Gas Storage report showed.
The natural gas contract for May dropped 6¢ to a rounded $2.62/MMbtu. The Henry Hub, La., gas price on Apr. 8 held unchanged at $2.67/MMbtu.
Heating oil for May delivery dropped a rounded 8.6¢ to a rounded $1.70/gal. The price for reformulated gasoline stock for oxygenates blending for May was down 12¢ to a rounded $1.74/gal.
The May ICE contract for Brent crude plunged by $3.55 to $55.55/bbl, while the June contract was down by $3.47 to $56.69/bbl. The ICE gas oil contract for April dropped $11.50 to $529/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $54.28 on Apr. 8, down 33¢.
Contact Paula Dittrick at firstname.lastname@example.org.
*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.