MARKET WATCH: Brent oil prices climb; NYMEX oil price holds below $53/bbl

US light, sweet crude oil prices settled slightly lower on the New York market July 7 to remain under $53/bbl as Brent crude oil prices gained modestly on the London market while an extended deadline passed without an agreement between Iran and international powers over Iran’s nuclear program.

Iran, the US, the UK, France, Germany, Russia, and China reportedly gave themselves until at least July 10 to negotiate an agreement, although it appeared negotiators were striving to wrap up in 48 hr.

“I believe we will in the near term either get this deal or find out we can’t,” a US official told Reuters, adding that a rough draft of an agreement involved five technical annexes and a total of about 80 pages. The official close to the talks spoke with Reuters on July 7 on conditions of anonymity.

Text of a proposed accord contains many brackets highlighting areas of disagreement. United Nations Security Council sanctions reportedly are proving to be among the most difficult to resolve.

“Removing the remaining brackets, this seems to be very, very, very tough,” a senior Western diplomat told reporters, Reuters reported.

US Sec. of State John Kerry and Iranian Foreign Minister Mohammad Javad Zarif stayed in Vienna and continued talks while most other foreign ministers left. Federica Mogherini, European Union foreign policy chief, stayed in Vienna to help coordinate negotiations toward a compromise.

US oil, product supplies rise

The US Energy Information Administration estimated US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 400,000 bbl for the week ended July 3 compared with the previous week. The latest total was 465.8 million bbl, the weekly Petroleum Status Report said.

Total motor gasoline inventories increased 1.2 million bbl, and EIA described that level as being in the upper half of the average range. Both finished gasoline inventories and blending components inventories increased.

Distillate fuel inventories increased by 1.6 million bbl, and EIA said that level was the middle of the average range for this time of year. Propane-propylene inventories rose 2.2 million bbl, which EIA said was above the upper limit of the average range.

US refinery inputs averaged 16.6 million b/d for the week ended July 3, up 65,000 b/d from the previous week’s average. Refineries operated at 94.7% of capacity last week.

Gasoline production decreased last week, averaging 9.9 million b/d. Distillate fuel production increased last week, averaging 5.1 million b/d.

US crude oil imports averaged more than 7.3 million b/d, down 197,000 b/d from the previous week. During the last 4 weeks, crude oil imports averaged 7.2 million b/d, 1.6% below the same 4-week period last year.

Total motor gasoline imports, including finished gasoline and gasoline blending components, averaged 852,000 b/d for the week ended July 3. Distillate fuel imports averaged 164,000 b/d.

Energy prices

The August crude oil contract on the New York Mercantile Exchange dropped 20¢ on July 7 to $52.33/bbl. The September contract dropped 13¢ to $52.71/bbl.

The natural gas contract for August was down 4¢ to a rounded $2.72/MMbtu. The Henry Hub, La., gas price was $2.73/MMbtu on July 7, down 1¢.

Heating oil for August gained less than a penny to remain at a rounded $1.71/gal. The price for reformulated gasoline stock for oxygenates blending for August rose 2.6¢ to a rounded $1.95/gal.

The August ICE contract for Brent crude gained 31¢ to $56.85/bbl on July 7, while the September contract climbed 33¢ to $57.36/bbl. The ICE gas oil contract for July was down $18.25 to $518/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 7 was $54.23/bbl, down $1.53.

Contact Paula Dittrick at paula@ogjonline.com.

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

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