Posted on 07/25/2013 5:22:31 PM PDT by ckilmer
The price of the benchmark U.S. crude oil, West Texas Intermediate, fell the most in more than a month Wednesday as American output surged to a 22-year high last week and Chinese manufacturing contracted more than economists estimated.
(Excerpt) Read more at moneynews.com ...
“There were good-sized supply draws, but we still have a surplus,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “We aren’t going to see a deficit anytime soon. The market has been paying a lot of attention to China recently so the weak Chinese data is also relevant.”
WTI oil for September delivery sank $1.84 to settle at $105.39 a barrel on the New York Mercantile Exchange. It was the biggest decline since June 21. The volume of all futures traded was 1.4 below the 100-day average for the time of day at 3:29 p.m. Prices have advanced 9.1 percent this month and are up 15 percent this year.
Brent crude for September settlement dropped $1.23, or 1.1 percent, to end the session at $107.19 a barrel on the London- based ICE Futures Europe exchange. The volume of all futures traded was 16 percent below the 100-day average. The European benchmark grade settled at a $1.80 premium to WTI, up from $1.19 Tuesday. Brent slid below the U.S. grade in intraday trading on July 19 for the first time since August 2010.
Crude Supplies
U.S. crude production has surged as the combination of horizontal drilling and hydraulic fracturing, or fracking, has unlocked supplies trapped in shale formations in the central part of the country.
Crude stockpiles decreased 29.9 million barrels in the four weeks ended July 19, the largest four-week drop in data dating to 1982, according to the EIA, the Energy Department’s statistical unit. Inventories surged to 397.6 million on May 24, the most since 1931.
Stockpiles at Cushing, Oklahoma, the delivery point for WTI, dropped 2.06 million barrels to 44 million last week, the report showed. Supplies reached a record 51.9 million barrels in the week ended Jan. 11.
Refineries operated at 92.3 percent of capacity, down 0.5 percentage point from the prior week. Utilization rates usually peak during the summer months when U.S. gasoline demand rises.
Fuel Inventories
Gasoline stockpiles slid 1.39 million barrels to 222.7 million. Inventories of distillate fuel, a category that includes heating oil and diesel, fell 1.23 million barrels to 126.5 million.
Total petroleum consumption rose 1.1 percent to 19.7 million barrels a day on average over the past four weeks, the most since January 2011.
WTI climbed to $109.32 on July 19, the highest intraday level since March 2012, on signs the U.S. economy is rebounding and on falling crude inventories.
“These numbers signal that demand is pretty good and portend that we will see rosier economic growth in the months ahead,” said Chip Hodge, who oversees a $9 billion natural- resource bond portfolio as senior managing director at Manulife Asset Management in Boston. “The market has had a hell of a run and it would take incredibly bullish numbers to push the market to new highs.”
Chinese Manufacturing
If the Chinese manufacturing number is confirmed in the final report Aug. 1, it would be the lowest level in 11 months. Readings below 50 indicate contraction.
China was responsible for 12 percent of global oil consumption and 22 percent of total energy use in 2012, according to BP Plc’s Statistical Review of World Energy. The U.S. accounted for 20 percent of oil demand and 18 percent of total energy use last year.
“The market is sputtering after reaching 16-month highs,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “Tighter fundamentals, signs of further global economic growth and increasing geopolitical tensions will be needed if oil is going to reach new highs.”
Dollar Strength
The Standard & Poor’s 500 Index dropped 0.5 percent and the Dow Jones Industrial Average fell 0.4 percent. The Bloomberg U.S. Dollar Index, which tracks the currency against 10 others, was up 0.5 percent at 1,030.90 at 3:29 p.m. A stronger U.S. currency curbs the appeal of commodities as an investment. The Standard & Poor’s GSCI Index of 24 raw materials slipped 1 percent, led by declines in coffee and WTI crude.
And fuel prices continue to rise! Why?
That’s my question. Of Course here in Md. Our boy O’Malley decided to raise the tax on it, that raised it some.
My advice to any reading this , If O’Malley runs for the Presidency run the other way.
I’m sure gas will go up another .10 this week, then.
Also, you should note that even after the sharp drop in crude oil prices, oil is trading much higher today than it was several months ago. Gasoline today is produced with oil that was purchased a while ago, not with oil that is produced under a September 2013 contract.
Average US gas prices were higher five years ago than they are today.
IDK about whatever country you are talking about.
not sure what part of the country you're in, here in N.E. Will County, Illinois we haven't seen gas prices below $4/gal much in the last 5 years.
We had $3.89/gal for TWO DAYS last week then right back up to $4.29/gal in less than a week. All told, I'd guess we've had gas below $4/gal a total of 180 days in the last 5 years....
I'm probably luckier than most, I only fill the gas guzzling SUV up every 3 weeks or so since I drive about 9 miles a day...
Wow, the democrat scum will be bragging about gasoline being “all the way down” to $3.00 a gallon by election time.
But but but ...what about peak oil? It just sucks when an idea that “everybody agrees with” is not adhered to.
And fuel prices continue to rise! Why?
......
summer driving season.
The price of gasoline is remarkably stable compared to the run up in the price of oil. Almost a strange decoupling again.
Refining margins have been pretty good though. Exxon is teed up on a massive expansion at Baytown aren’t they?
What I found to be interesting was that “Energy Information Administration said crude production rose 0.9 percent to 7.56 million barrels a day”
that compares with an average of about 7 million barrels@ day in November and december 2012.
http://www.eia.gov/todayinenergy/detail.cfm?id=10171
so if production keeps rising at the same rate—production is on track to go over 8 million barrels @ day by the end of the year.
You can see the weekly estimates from EIA at:
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=WCRFPUS2&f=W
Wow, the democrat scum will be bragging about gasoline being “all the way down” to $3.00 a gallon by election time.
.........
yeah that’s the sad thing about this stuff.even though the dems will have done everything they can to throttle the development of oil/gas— they’ll take credit for the successes come election time.
Inflation.
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