The light, sweet crude oil contract for July delivery held above $50/bbl for a second consecutive day, closing at $51.23/bbl on the New York market on June 8 after the US government reported a decline in the weekly oil inventory. It was the US benchmark’s highest close since July 15, 2015.
US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, fell 3.2 million bbl for the week ended June 3 compared with the previous week, the US Energy Information Administration said in its weekly Petroleum Status Report. At 532.5 million bbl, inventories remain at historically high levels for this time of year (OGJ Online, June 8, 2016).
EIA reported US oil production increased 10,000 b/d for the week ended June 3 compared with the previous week. The latest production estimate was 8.745 million b/d, which was still 865,000 b/d less than oil production for the same period a year ago.
Statistics show China’s oil imports remained strong during May. China is the world’s second-largest oil consumer. Analyst say positive news about China demand can boost crude oil prices.
Although China’s oil imports fell during May because of refinery maintenance, import levels still rose about 40% compared with May 2015. Total Chinese oil imports for 2016 through May were 16% higher than for the same 5-month period last year, Commerzbank analysts said.
China’s crude net imports stood at 7.62 million b/d in May, modestly lower than in April and significantly higher than for May 2015.
“Lower domestic production and higher refinery runs from strong product demand are the main drivers of increased imports,” Barclay analysts said in a research note. Barclays expects China’s new strategy petroleum reserve capacities could also add incremental demand this year.
The July crude oil contract on the New York Mercantile Exchange rose 87¢ on June 8, settling at $51.23/bbl. The August contract also climbed 92¢ to $51.84/bbl.
Natural gas for July edged down less than a penny to remain at a rounded $2.47/MMbtu on NYMEX while the Henry Hub cash price rose 5¢ to $2.33/MMbtu.
Heating oil for July delivery gained 2.9¢ to a rounded $1.57/gal. The price for reformulated gasoline stock for oxygenates blending for July increased 3¢ to a rounded $1.62/gal.
The August Brent crude contract on London’s ICE climbed $1.07 to $52.51/bbl, marking Brent’s highest settlement since Oct. 9, 2015. The September contract was up $1.09 to $52.98/bbl. The June gas oil contract rose $8.25 to $464.50/tonne.
OPEC’s basket of crudes price for June 8 was $47.76/bbl, up $1.13.
Contact Paula Dittrick at email@example.com.