Light, sweet crude oil prices toppled more than $1/bbl on the New York market on Mar. 7 after the US Energy Information Administration’s weekly inventory report showed crude supplies rose 2.4 million bbl (OGJ Online, Mar. 7, 2017).
Excluding the Strategic Petroleum Reserve, EIA estimated 425.9 million bbl in total US crude oil supplies during the week ended Mar. 2. Meanwhile, US oil production increased 86,000 b/d to 10.369 million b/d, the Petroleum Status Report showed.
Lower 48 oil production was up 80,000 b/d to 9.852 million b/d while Alaska production was up 6,000 b/d to 517,000 b/d.
“The high production level leaves no room to doubt the robustness of US oil production, so the market response is understandable,” said Commerzbank analyst Carsten Fritsch.
EIA expects US crude production will average a record 10.7 million b/d this year, rising to 11.3 million b/d in 2019.
Meanwhile, US President Donald Trump was expected this week to sign tariffs on steel and aluminum imports under a legal provision covering national security that allows him to take such action.
Administration officials say the plan initially would exempt Canada and Mexico. The administration has linked the exemptions to renegotiations of the North American Free Trade Agreement. Traders and analysts await more details.
Meanwhile, certain countries have suggested the tariffs could prompt a trade war. US trading partners likely to be most negatively affected will be Brazil and South Korea, Wood Mackenzie Ltd. has said (OGJ Online, Mar. 2, 2017).
Energy prices
The April light, sweet crude contract on the NYMEX declined $1.45 on Mar. 7 to settle at $61.15/bbl. The May contract fell $1.43 to $61.02/bbl.
The NYMEX natural gas price for April rose nearly 3¢ to a rounded $2.78/MMbtu. The Henry Hub cash gas price was up 4¢ to $2.77/MMbtu on Mar. 7.
Ultralow-sulfur diesel for April increased by nearly 3¢ to remain at a rounded $1.87/gal. The NYMEX reformulated gasoline blendstock for April declined 2¢ to $1.91/gal.
Brent crude oil for May settled down $1.45 to $64.34/bbl on London’s International Commodity Exchange. The June contract was down $1.40 to $64.15/bbl. The gas oil contract for March was $571.75/tonne, up 25¢.
The Organization of Petroleum Exporting Countries’ basket of crudes was $62.68/bbl on Mar. 7, down 56¢.
Contact Paula Dittrick at [email protected].
