MARKET WATCH: NYMEX crude oil climbs back above $30/bbl

Light, sweet crude oil prices for March delivery gained more than $1/bbl on the New York market to settle above $30/bbl after Iran Oil Minister Bijan Zanganeh called a production freeze pact struck by Saudi Arabia, Qatar, Venezuela, and Russia a “first step” toward stabilizing the market.

But Iran stopped short of actually committing to join the accord, which hinges on other countries agreeing to also freeze production. Iraq also has yet to commit to that agreement.

Jodie Gunzberg, global head of commodities and real assets at S&P Dow Jones Indices, notes that the Feb. 17 closing marked the biggest 3-day gain in about 6 months for the index.

“Historically, gains of this magnitude have only happened near oil bottoms,” Gunzberg said.

Patricia Mohr of Scotiabank said the battle for oil market share between Saudi Arabia and US shale producers as well as Saudi Arabia’s desire to keep its market share from slipping to Iran and Iraq “has prevented a rebalancing of excessive world supplies despite generally favorable demand prospects.”

Mohr said oil and demand conditions might not fully rebalance until 2017.

“Saudi Arabia has been successful in blunting US shale production, though overall US output has only edged down by 376,000 b/d from the April 2015 peak through November,” Mohr said.

Regarding oil and product statistics, the Energy Information Administration’s weekly Petroleum Status Report showed US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 2.1 million bbl for the week ended Feb. 12 compared with the previous week. The latest estimated total was 504.1 million bbl.

Analysts surveyed by The Wall Street Journal in advance of the inventory’s release had expected EIA’s estimate to show an increase of 3.3 million bbl.

Separately, the American Petroleum Institute reported its own estimate showed a 3.3 million-bbl drop for the week ended Feb. 12.

Gasoline supplies climb

EIA said total motor gasoline inventories increasing 3 million bbl, putting levels well above the upper limit of the average range.

Distillate fuel inventories increased 1.4 million bbl, which EIA said meant inventory also was above the upper limit of the average range for this time of year. Propane-propylene inventories fell 4.3 million bbl for the week ended Feb. 12, but are well above the upper limit of the average range, EIA said.

Total products supplied over the last 4-week period averaged 19.8 million b/d, down 0.2% from the same period last year. Over the last 4 weeks, motor gasoline product supplied averaged 8.9 million b/d, up 3% from the same period last year.

US refinery inputs averaged over 15.8 million b/d during the week ended Feb. 12, which was 338,000 b/d more than the previous week. Refineries operated at 88.3% of capacity.

Crude oil imports averaged more than 7.9 million b/d, up 795,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.7 million b/d, 5.8% above the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 565,000 b/d. Distillate fuel imports averaged 232,000 b/d for the week ended Feb. 12.

Energy prices

The March crude oil contract on the New York Mercantile Exchange gained $1.62 to settle at $30.66/bbl on Feb. 17. The April contract climbed by $2.01 to $32.98/bbl.

The NYMEX natural gas contract for March was up nearly 4¢ to a rounded $1.94/MMbtu. The Henry Hub gas price was down 1¢ to $1.91/MMbtu.

Heating oil for March delivery gained 6¢ to a rounded $1.09/gal. The price for reformulated gasoline stock for oxygenates blending for March climbed 3¢ to a rounded $1/gal on Feb. 17.

The April ICE contract for Brent crude increased $2.32 to $34.50/bbl, and the May contract gained $2.29 to settle at $35.13/bbl. The ICE gas oil contract for March was $320.75/tonne, up $15.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $28.18/bbl, down $1.17.

Contact Paula Dittrick at

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