Light, sweet crude oil prices for September delivery fell more $1/bbl on the New York market Aug. 10 on reports of increased Saudi production during July over June and an unexpected climb in the weekly US crude oil inventory, which showed commercial crude oil inventories up 1.1 million bbl.
US crude inventories, excluding the Strategic Petroleum Reserve, reached an estimated 523.6 million bbl for the week ended Aug. 5 (OGJ Online, Aug. 10, 2016).
The Organization of Petroleum Exporting Countries reported Saudi Arabia and Iraq continue boosting production levels (OGJ Online, Aug. 10, 2016).
Separately, the International Energy Agency in Paris trimmed its world demand growth forecast. IEA expects world oil demand will rise 1.2 million b/d in 2017, which is down 100,000 b/d compared with its forecast released in July. IEA also foresees world oil inventories coming into balance with oil demand.
“Our balances show essentially no oversupply during the second half of the year,” IEA’s monthly report said Aug. 11.
Regarding US oil production, the EIA estimated output at 8.4 million b/d for the week ended Aug. 5, down 15,000 b/d from the week ended July 29.
The Petroleum Status Report showed production across the Lower 48 fell 13,000 b/d and Alaska production fell 2,000 b/d for the week ended Aug. 5 from the previous week.
EIA estimated natural gas in underground storage across the Lower 48 at 3.3 tcf as of Aug. 5, a net increase of 29 bcf from the previous week. Stocks were 361 bcf higher than last year at this time, the Gas Storage Report showed.
The NYMEX crude oil contract for September declined $1.06 to $41.71/bbl on Aug. 10. The October contract dropped $1.04 to close at $42.46/bbl.
The natural gas contract for September fell 5.4¢ to a rounded $2.56/MMbtu. On the spot market, the Henry Hub gas price declined 2¢ to $2.73/MMbtu on Aug. 10.
Heating oil for September fell 1¢ to a rounded $1.32/gal. The price for reformulated gasoline stock for oxygenates blending for September fell 4¢ to a rounded $1.30/gal.
The Brent crude contract for October on London’s ICE declined 93¢ on Aug. 10 to $44.05/bbl. The contract for November was down 92¢ to $44.43/bbl. The September gas oil contract settled at $386.25/tonne on Aug. 10. The gas oil contact for August expired Aug. 9 at $386.75/tonne.
The average price for OPEC’s basket of 12 benchmark crudes was $40.57/bbl, down 51¢.
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