Light, sweet crude oil prices for April delivery on the New York market traded relatively flat on Mar. 3, ending the day down 9¢/bbl. Meanwhile, US natural gas futures dropped nearly 4¢/MMbtu after a weekly report showed a continued high level of gas in underground storage across the Lower 48.
Working gas in storage was 2.536 tcf as of Feb. 26, a net decline of 48 bcf from the previous week. Stocks were 794 bcf higher than last year at this time and 666 bcf above the 5-year average of 1.870 tcf. The latest estimate also remained above the 5-year historic range, the Energy Information Administration estimated in its Gas Storage Report (OGJ Online, Mar. 3, 2016).
“We stand by our view that the market is structurally oversupplied and will require aggressive demand growth incentivized by low gas prices and cooler weather to avoid overflowing storage in 2016,” Raymond James & Associates said in a research note.
The 48 bcf withdrawal was above a consensus estimate by analysts of 39 Bcf and the Raymond James estimate of 37 Bcf for the week ended Feb. 27.
The Mar. 3 close of a rounded $1.64/MMbtu marked the lowest front month contract price since Feb. 26, 1999, when the US gas futures front-month closing price dipped to a rounded $1.63/MMBtu.
"Front-month prices are still in the red after another withdrawal that added to the storage surplus, but longer-term futures are moving higher because the report was higher than expectations and showed a decent baseline of power generation demand," Aaron Calder, Gelber & Associates analyst, said in a market note.
The NYMEX natural gas contract for April was down nearly 4¢ to a rounded $1.64/MMbtu. The Henry Hub gas price for Mar. 3 was unavailable.
Heating oil for April delivery rose 1¢ to a rounded $1.12/gal. The price for reformulated gasoline stock for oxygenates blending for April dropped 1¢ to a rounded $1.30/gal on Mar. 3.
The Brent crude contract for May on London’s ICE climbed 14¢ to $37.07/bbl, up 14¢. The June ICE contract gained 15¢ to settle at $37.70. The ICE gas oil contract for March was $330.50/tonne, down $1.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $31.61/bbl, down 4¢.
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