MARKET WATCH: NYMEX crude oil drops on massive inventory build

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

Energy prices

The December crude oil contract on the New York Mercantile Exchange fell $1.33 on Nov. 3 to close at $45.34/bbl. The January contract was down $1.31 to $45.93/bbl.

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.

Contact Paula Dittrick at

Did You Like this Article? Get All the Energy Industry News Delivered to Your Inbox

Subscribe to an email newsletter today at no cost and receive the latest news and information.

 Subscribe Now


Shell Leverages Data to Transform from Reactive to Predictive Operations

This 6-page report describes how Shell engaged in a massive project with OSIsoft to transform the...

Selection, Use, Care and Maintenance of FR Clothing

For industries operating in an inherently dangerous environment, the importance of selecting the ...

Evolution or Revolution: IT / OT convergence means a world of possibilities

The oil and gas industry is experiencing a rapid paradigm shift in regards to digital transformat...

Predict, Prescribe, Profit: Creating a World that Doesn't Break Down

What are you doing to reduce unplanned downtime at your plant? Equipment breakdowns and process i...