MARKET WATCH: NYMEX oil prices jump on big crude inventory draw
Crude oil futures prices on the New York market settled Jan. 15 more than $1.50/bbl higher than the previous day after a weekly government report showed a larger-than-expected draw in US crude oil supplies.
The US Energy Information Administration reported oil inventories dropped 7.7 million bbl to 350.2 million bbl, which surprised analysts. A Wall Street Journal poll earlier in the week showed analysts expected a drop of 800,000 bbl.
The report for the week ended Jan. 10 marked the biggest one-week drop since the week ended Dec. 6, 2013.
The EIA’s weekly US underground gas storage report on Jan. 16 showed a significant withdrawal in gas supplies, but it was not as severe as some analysts had expected after a recent cold snap across much of the Midwest and some of the East Coast.
Working gas in storage was estimated at 2.53 tcf as of Jan. 10, which was a net decline of 287 bcf from the previous week. Stocks were 659 bcf lower than last year at this time and 443 bcf below the 5-year average of 2.97 tcf.
On international oil markets, Brent crude oil prices improved modestly upon a wire service news story out of China as well as a monthly supply report from the Organization of Petroleum Exporting Countries.
Analysts noted a Reuters news report that said China National Petroleum Corp.’s research institute believes China’s oil demand will increase 4% to 10.36 million b/d during 2014.
The estimate was larger than an earlier, separate report from the International Energy Agency, which forecast Chinese oil demand would increase 3.7% in 2014.
The OPEC supply report showed December oil production by the cartel’s members was slightly below expectations. OPEC’s estimated production dropped 20,000 b/d to 29.44 million b/d.
OPEC also estimated 2013 demand for OPEC crude at 29.9 million b/d, representing a decrease of 500,000 b/d from 2012. In 2014, demand for OPEC crude is forecast at 29.6 million b/d, a drop of 400,000 b/d from 2013, the report said.
Energy prices
The New York Mercantile Exchange February crude contract was up $1.58 on Jan. 15, closing at $94.17/bbl. The March contract gained $1.57 to settle at $94.35/bbl.
Heating oil for February delivery climbed 4.3¢ to a rounded $2.98/gal. Reformulated gasoline stock for oxygenate blending for February delivery edged up a fraction of a penny to rounded $2.63/gal.
The February natural gas contract on NYMEX dropped 4.4¢ to settle at a rounded $4.33/MMbtu. On the US spot market, the Jan. 15 gas price at Henry Hub climbed 7.9¢ to a rounded 4.43/MMbtu.
In London, the February ICE contract for Brent crude oil was up 74¢, closing at $107.13/bbl. The March Brent contract gained 67¢ to settle at $106.27/bbl. The ICE gas oil contract for February climbed $13.50 to $913.75/tonne.
The Organizational of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $104.35/bbl on Jan. 15, up 36¢.
Contact Paula Dittrick at [email protected].
Paula Dittrick | Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.
