The light, sweet crude oil price for September rallied by more than $1/bbl on the New York market Aug. 3 after the US Energy Information Administration reported a larger-than-expected drop in US gasoline supplies.
EIA estimated total motor gasoline inventories decreased 3.3 million bbl for the week ended July 29. The agency said gasoline inventories remained well above the upper limit of the average range for this time of year (OGJ Online, Aug. 3, 2016).
US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 1.4 million bbl to 522.5 million bbl.
Oil production across the Lower 48 held constant for the week ended July 29 while Alaska production declined 55,000 b/d. US oil production declined to 8.46 million b/d for the week ended July 29, the Petroleum Status Report said.
Pavel Molchanov, analyst with Raymond James & Associates in Houston, said in a research note: “Lower 48 production was 8.033 million b/d, flat from last week,” after 20 consecutive weeks of decline.
“As always, though, weekly demand and supply figures must be taken with a grain of salt. Oil prices had been exhibiting a durable rally from February’s 13-year lows, though the past month was marked by a sharp pullback, with West Texas Intermediate falling below $40/Bbl earlier this week.”
Molchanov said much of the price pullback, “looks to us like a technical trade, prices are still weighed down by several fundamental factors: rising exports from Iran, macro uncertainty, and a stronger dollar in the wake of the UK’s Brexit vote, and (most recently) concern about high levels of refined product inventories.”
British voters approved a referendum to exit the European Union (OGJ Online, June 27, 2016).
The NYMEX crude oil contract for September climbed $1.32 to settle at $40.83/bbl on Aug. 3. The October contract gained $1.28 to close at $41.58/bbl.
The natural gas contract for September rose 10.6¢ to a rounded $2.84/MMbtu. On the spot-market, the Henry Hub gas price gained 9¢ to $2.88/MMbtu on Aug. 3.
Heating oil for September gained 2.8¢ to at a rounded $1.29/gal. The price for reformulated gasoline stock for oxygenates blending for September rose 4¢ to a rounded $1.35/gal.
The Brent crude contract for October on London’s ICE climbed $1.30 on Aug. 2 to $43.10/bbl. The contract for November was up $1.25 to $43.48/bbl. The August gas oil contract settled at $363.50/tonne, up $6.25.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $38.43/bbl, up 14¢.
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