MARKET WATCH: Front-month crude futures settle above $61/bbl mark

US crude oil futures contract for July and August delivery settled above $61/bbl on the New York market on June 23 ahead of a government report that showed the eighth consecutive weekly decline in crude inventories. The US Energy Information Administration said commercial crude oil inventories, excluding the Strategic Petroleum Reserve, decreased 4.9 million bbl for the week ended June 19 from the previous week. The estimated US crude oil total was 463 million bbl, the Petroleum Status Report said.

“Oil market sentiment remains relatively weak, with Brent prices having recently struggled to hold any gains above $65/bbl,” said Paul Horsnell, Standard Chartered head of commodities research. “We expect [world oil] demand to continue to outperform consensus expectations, and our full-year forecast for global demand growth currently stands at a very strong 1.7 million b/d.”

EIA said US refinery inputs averaged more than 16.5 million b/d, marking a level that was 250,000 b/d more than the previous week’s average. Refineries operated at 94% of capacity last week.

Gasoline production increased last week, averaging more than 9.9 million b/d. Distillate fuel production decreased, averaging about 5 million b/d. Total motor gasoline inventories increased 700,000 bbl, and EIA said that level was in the upper half of the average range.

Finished gasoline inventories decreased while blending components inventories. Distillate fuel inventories increased 1.8 million bbl last week and are in the middle of the average range for this time of year.

Propane-propylene inventories rose 1.3 million bbl, which EIA said was well above the upper limit of the average range.

US crude oil imports averaged 6.8 million b/d for the week ended June 19, down 302,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7 million b/d, which was 3.5% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 896,000 b/d, and distillate fuel imports averaged 128,000 b/d.

Energy prices

The July crude oil contract on the New York Mercantile Exchange gained 63¢ on June 23 to settle at $61.01/bbl. The August contract was up 59¢ to settle at $61.33/bbl.

The natural gas contract for July was down less than a penny to remain at a rounded $2.73/MMbtu. The Henry Hub, La., gas price was up 6¢ to $2.83/MMbtu.

Heating oil for July rose 4¢ to a rounded $1.91/gal. The price for reformulated gasoline stock for oxygenates blending for July climbed by a rounded 5¢ to a rounded $2.08/gal.

The August ICE contract for Brent crude was up $1.11 to $64.45/bbl while the September contract gained $1.03 to $65.13/bbl. The ICE gas oil contract for July was up $13 to $583.25/tonne.

The average price for OPEC’s basket of 12 benchmark crudes for June 23 was $59.96/bbl, up 60¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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

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