MARKET WATCH: NYMEX oil gains despite inventory build

Light, sweet crude oil prices for March delivery managed to climb modestly to close at $30.77/bbl Feb. 18 in a volatile trading week on the New York market. The gain came after a weekly government report showed another increase in US crude oil supplies.

Crude inventories rose 2.1 million bbl to 504.1 million bbl for the week ended Feb. 12, the US Energy Information Administration said in its Petroleum Status Report, released a day later than normal because of the Presidents’ Day holiday on Feb. 15 (OGJ Online, Feb. 18, 2015).

The Wall Street Journal reported oil inventories last exceeded 500 million bbl in 1930, noting that records that far back involve monthly statistics that do not line up exactly with weekly data.

WSJ also reported the US oil benchmark has settled up or down by 1% or more for 23 straight sessions until Feb. 18, which was the longest streak since 2009.

Crude oil prices have gained momentum after Saudi Arabia, Russia, Venezuela, and Qatar said they would freeze oil production at existing levels if other producers, both members of the Organization of Petroleum Exporting Countries and also non-OPEC producers, joined the pact.

Citibank analysts said the oil market rally was “clutching at straws.”

In a Feb. 18 research note, Citibank Analyst Seth Kleinman said, “The market clearly wants to see some signs of life in OPEC, but we think bulls (or rather producers fearful of further price falls) are likely to be better served” by focusing on the summer gasoline demand outlook.

Regarding gas in underground storage across the Lower 48, EIA estimated levels at 2.706 tcf as of Feb. 12, which was a net decline of 158 bcf from the previous week.

Stocks were 532 bcf higher than last year at this time and 555 bcf above the 5-year average of 2.151 tcf, the Gas Storage Report said.

Energy prices

The March crude oil contract on the New York Mercantile Exchange gained 11¢ to settle at $30.77/bbl on Feb. 18. The April contract fell 5¢ to $32.93/bbl.

The NYMEX natural gas contract for March was down 9¢ to a rounded $1.85/MMbtu. The Henry Hub gas price was up 4¢ to $1.87/MMbtu.

Heating oil for March delivery dropped nearly 1¢ to a rounded $1.08/gal. The price for reformulated gasoline stock for oxygenates blending for March declined 3¢ to a rounded 97¢/gal on Feb. 18.

The April ICE contract for Brent crude dropped 22¢ to $34.28/bbl, and the May contract dropped 25¢ to settle at $34.88/bbl. The ICE gas oil contract for March was $321.25/tonne, up 50¢.

The average price for OPEC’s basket of 12 benchmark crudes was $29.26/bbl, up $1.08.

Contact Paula Dittrick at

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