The light, sweet oil price for August delivery fell to nearly $49/bbl on the New York market June 22 after a weekly government inventory report showed US crude oil supplies had fallen less than expected.
The US Energy Information Administration said crude inventories fell 900,000 bbl for the week ended June 17. Analysts surveyed by The Wall Street Journal had expected a 1.6-million bbl drop (OGJ Online, June 22, 2016).
US crude production fell 39,000 b/d for the week ended June 17 to 8.7 million b/d, the Petroleum Status Report said.
Citigroup analysts said they believe that June 7-9 rallies that resulted in oil prices of more than $50/bbl on the New York market will encourage shale producers.
“This could boost the outlook for US crude oil production going forward,” Citigroup said.
Meanwhile, analysts and traders await the outcome of a June 23 referendum on whether Britain will leave the European Union. Polls have been split about the upcoming vote.
US natural gas prices retreated from a 10-month high on June 22 upon some revised weather forecasts that temperatures in the next 2 weeks could be cooler than previously expected, limiting demand for gas-fired power generation for air conditioning.
Regarding gas in underground storage across the Lower 48, EIA estimated levels at 3.1 tcf as of June 17, which was a net increase of 62 bcf from the previous week. Stocks were 618 bcf higher than last year at this time and 678 bcf above the 5-year average of 2.4 tcf, the Gas Storage Report said.
Natural gas for July dropped 9¢ to a rounded $2.68/MMbtu on NYMEX. The Henry Hub cash price was up 2¢ to $2.78/MMbtu.
Heating oil for July delivery declined 1¢ to a rounded $1.50/gal. The price for reformulated gasoline stock for oxygenates blending for July fell less than a penny to remain at a rounded $1.59/gal.
The August Brent crude contract on London’s ICE dropped 74¢ to $49.88/bbl. The September contract was down 66¢ to $50.60/bbl. The July gas oil contract settled at $447/tonne on June 22, up $1.
OPEC’s basket of crudes price for June 22 was $46.46/bbl, up 44¢.
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