OIL PRICES DOWN TO $44.75
OGJ said, the light, sweet crude oil price for August delivery fell by more than $2/bbl on July 13 to settle at $44.75/bbl, which was the lowest front-month closing since May 10. The price drop followed a weekly US inventory report that showed continuing high crude oil and product supply levels.
The Energy Information Administration said US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, fell 2.5 million bbl to 521.8 million bbl for the week ended July 8 compared with the previous week's total.
Crude supplies remain at historically high levels for this time of year. Total motor gasoline inventories rose 1.2 million bbl, well above the upper limit of the average range.
US crude refinery inputs operated at 92.3% of capacity for the week ended July 8 while refinery runs averaged 16.5 million b/d.
Refineries could reduce activity because of high-product supplies, which would in turn push more crude oil into storage.
"This is just going to inspire more talk and implementation of run cuts, further depressing demand for crude oil and exacerbating the glut in that market," said Andy Lipow, president of Lipow Oil Associates. "I call this the death spiral."
EIA said US production was 8.45 million b/d, up 57,000 b/d for the week ended July 8 compared with the previous week. Alaska's production was up 71,000 b/d, which outweighed a production decline across the Lower 48 of 14,000 b/d.
Separately, the International Energy Agency said large world crude oil inventories remain "a major dampener on oil prices."
The amount of crude oil and refined products being held in tankers floating offshore in June reached its highest level since 2009, IEA said.
"The tone of the IEA report certainly is quite negative," said Michael Hsueh, Deutsche Bank analyst.
The crude oil contract for August on the New York Mercantile Exchange plunged $2.05 on July 13 to settle at $44.75/bbl. The September contract dipped $2.13 to $45.44/bbl.
The natural gas contract for August was up a fraction of a cent to $2.74/MMbtu. The Henry Hub gas price was $2.81/MMbtu, up 6¢ on July 13.
Heating oil for August delivery fell 8¢ to $1.38/gal. The price for reformulated gasoline stock for oxygenates blending for August dropped 5¢ to a rounded $1.38/gal.
The September Brent crude contract on London's ICE fell $2.21 on July 13 to $46.26/bbl. The contract for October decreased $2.24 to $46.81/bbl. The August gas oil contract settled at $403.75/tonne, down $19.75.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 benchmark crudes was $43.19/bbl on July 13, down 3¢.
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