Light, sweet crude oil prices for March delivery fell after a weekly US government report showed US commercial crude oil inventories, excluding the Strategic Petroleum Reserve, rose for a third consecutive week.
EIA said US oil production for the week ended Jan. 20 totaled 8.96 million b/d, up 17,000 b/d from the previous week. Lower 48 production gained 1,000 b/d to 8.43 million b/d for the week while Alaska production gained 16,000 b/d to 529,000 b/d.
Increased US oil inventories and production could slow a reduction in ample world oil supplies. The Organization of the Petroleum Exporting Countries and some non-OPEC producers agreed last year to cut oil production to support oil prices.
“For now we’ve been focused on the announcement of the production cuts from OPEC, but we need to keep in mind that we are starting the period of refining maintenance and that translates into lower demand for crude oil,” said Petromatrix analyst Olivier Jakob.
“The OPEC cuts are factored in, you would want to see some strong evidence of crude oil stock draws, especially in the US and that is not yet the case,” he added.
The crude oil contract for March delivery on the New York Mercantile Exchange fell 43¢ on Jan. 25 to $52.75/bbl. The April crude oil contract dropped 47¢ to $53.39/bbl.
US natural gas futures for February delivery gained 5¢ to a rounded $3.33/MMbtu. The Henry Hub spot gas price was unchanged at $3.25/MMbtu.
Heating oil for February decreased 3¢ to a rounded $1.61/gal. Reformulated gasoline stock for oxygenate blending for February fell 5¢ to a rounded $1.52/gal.
The Brent crude contract for March on London’s ICE dropped 36¢ to $55.08/bbl. The April contract was down 43¢ to $55.42/bbl. Gas oil for February closed Jan. 25 at $487.75/tonne, down 75¢.
The average price for OPEC’s basket of benchmark crudes on Jan. 25 was $52.51/bbl, up 41¢.
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