MARKET WATCHLarge jump in US oil stocks depresses energy futures prices
By OGJ editors
HOUSTON, Apr. 15 -- US energy futures prices continued to decline Wednesday amid industry and government reports of large increases in commercial US crude inventories.
The US Energy Information Administration said Wednesday that US crude stocks jumped by 3.2 million bbl to 295.4 million bbl during the week ended Apr. 9, far more than the 175,000 bbl build projected by traders. US gasoline inventories rose by 1 million bbl to 201.1 million bbl during the same period, while distillate stocks fell by 2 million bbl to 103.2 million bbl, with heating oil accounting for nearly all of that loss, IEA said.
The American Petroleum Institute reported an even sharper increase in US crude stocks, up by a whopping 10.4 million bbl to 302.7 million bbl during that same period. However, API said US gasoline stocks fell by 458,000 bbl to 195.9 million bbl, while distillate inventories plunged by 2.5 million bbl to 103.7 million bbl.
Although analysts generally consider EIA figures to be more reliable, the release of that data was delayed until late Wednesday, causing traders to rely on API numbers.
The latest EIA data also showed "abnormally low refinery runs of crude oil. As a result, crude oil inventories are rising while oil product markets are being tightened significantly," said Paul Horsnell, head of energy research at Barclays Capital Inc., London. "Gasoline demand remains extremely strong," he said. "Gasoline prices have hit record levels, with the seasonal inventory build still falling short."
Energy prices
The May contract for benchmark US light, sweet crudes dropped 49¢ to $36.72/bbl Wednesday on the New York Mercantile Exchange, while the June position lost 26¢ to $36.42/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., fell by 50¢ to $36.73/bbl.
Gasoline for May delivery dipped by 0.07¢ to $1.1553/gal Wednesday on NYMEX. However, heating oil for the same month climbed by 0.7¢ to 93.67/gal. The May natural gas contract declined by 4.4¢ to $5.74/Mcf on NYMEX, "pressured by week crude oil prices, a softer [natural gas spot] market, and forecasts for milder Northeast and Midwest [US] weather this week that should slow demand," said analysts Thursday at Enerfax Daily.
EIA on Thursday reported the injection of 15 bcf of natural gas into U.S. underground storage during the week ended Apr. 9. That compares with the initial seasonal injection of 20 bcf the previous week and the withdrawal of 46 bcf during the same period last year. US gas storage now stands at 1.049 tcf, representing a surplus of 407 bcf over the same period a year ago and a deficit of 57 bcf below the 5-year average.
In London, the May contract for North Sea Brent crude gained 26¢ to $33.45/bbl on the International Petroleum Exchange. Gas oil for May delivery inched up by 75¢ to $287/tonne. However, the May natural gas contract fell by 7.3¢ to the equivalent of $3.56/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes lost 50¢ to $32.10/bbl Wednesday.