Light, sweet crude oil for both December and January delivery fell more than $1/bbl Nov. 2 to settle under $46/bbl after a weekly US government inventory report for oil and products showed the biggest estimated crude oil weekly gain in more than 30 years that records have been kept.
US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, increased 14.4 million bbl for the week ended Oct. 28, the Energy Information Administration reported (OGJ Online, Nov. 2, 2016).
The Petroleum Status Report showed US total production at 8.52 million b/d for the week ended Oct. 28, up 18,000 b/d from the previous week. Lower 48 production was 8 million b/d. Alaska production was 510,000 b/d. The Lower 48 and Alaska each had estimated weekly production gains of 9,000 b/d.
US oil prices were prevented from declining even more steeply because the US dollar value declined. The dollar value fell after a Federal Reserve policy committee concluded a 2-day meeting Nov. 2, saying it would keep interest rates steady for now.
The Wall Street Journal reported its WSJ Dollar Index showed the dollar down 0.11% at 87.79. Oil is traded in dollars so a weakening dollar makes oil less expensive for buyers using other currencies.
EIA estimated natural gas in underground storage across the Lower 48 at 3.963 tcf as of Oct. 28, which was a net increase of 54 bcf from the previous week. The Gas Storage Report said stocks were 48 bcf higher than last year at this time
The natural gas contract for December fell 11¢ to a rounded $2.79/MMbtu. On the spot market, the Henry Hub gas price tumbled 26¢ to $2.27/MMbtu.
Heating oil for December fell 5¢ to a rounded $1.46/gal. The price for reformulated gasoline stock for oxygenates blending for December declined nearly 4¢ to a rounded $1.44/gal.
The January Brent crude contract on London’s ICE was down $1.28 to settle at $46.86/bbl. The Brent contract for February was down $1.26 to $47.69. The November gas oil contract settled at $422.50/tonne, down $14.25.
The average price for OPEC’s basket of benchmark crudes on Nov. 2 was $43.12, down $1.41.
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