BLBG: Oil Supplies Falling to Four-Month Low in Survey on Storm: Energy Markets
U.S. crude oil inventories probably fell to a four-month low last week as imports declined and Tropical Storm Bonnie disrupted production in the Gulf of Mexico, a Bloomberg News survey showed.
Stockpiles fell 1.75 million barrels, or 0.5 percent, in the seven days ended July 23 from 353.5 million the week earlier, according to the median of 11 analyst estimates before an Energy Department report tomorrow. The last time supplies were so low was March 19, when prices averaged $81.46 a barrel.
Producers evacuated 15 rigs and 106 production platforms in anticipation of Bonnie, idling 52 percent of U.S. Gulf oil output, according to according to the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement. The storm dissipated over the Gulf on July 24 without making landfall in the oil-producing region. About 27 percent of production remained shut-in yesterday.
“We’ll see storm-related statistics because we’ll see delays in the shipping and delays in production,” said Carl Larry, president of Oil Outlooks and Opinions LLC in Houston. “The big delays are going to come from imports and maybe even carry over to next week.”
Oil for September delivery settled at $78.98 a barrel yesterday on the New York Mercantile Exchange, unchanged from July 23. It was at $79.07 as of 11:43 a.m. in London today. Prices have dropped 0.4 percent this year.
The Gulf accounts for about 31 percent of U.S. oil output, according to the Energy Department.
Weekly Imports
While analysts forecast imports fell last week, they jumped 7.5 percent to an average 9.98 million barrels a day in the week ended July 16, Energy Department figures showed on July 21.
“You usually get a little bit of a drop-off in crude oil imports around this time of year,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “The seasonal focus at this time of year is on the end of summer and to get as much gasoline out of inventory as you can.”
Refineries probably operated at 91 percent of capacity last week, down 0.5 percentage point from the previous week, according to the median of analyst responses. Utilization rates in the week ended July 16 were at the highest level since August 2007.
“We’ve got so much crude in storage at this point, and demand hasn’t come in yet, so we’re unlikely to maintain refinery demand at these levels,” said Michael Fitzpatrick, vice president of energy at MF Global in New York.
Gasoline Supplies
Gasoline inventories increased 300,000 barrels, from 222.2 million the prior week, according to the survey. Eleven respondents gave product-supply estimates. Seven analysts anticipated an increase, and four forecast a decline.
U.S. gasoline demand in the four weeks ended July 16 climbed 0.5 percent to 9.36 million barrels a day, or about 16,000 less than the highest level since August 2008.
Stockpiles of distillate fuel, a category that includes heating oil and diesel, climbed 2 million barrels from 166.6 million, according to the survey. All 111 respondents forecast a gain.
Ten of the respondents forecast a decrease in oil supplies and one estimated a gain. The Energy Department is scheduled to release its weekly report tomorrow at 10:30 a.m. in Washington.
To contact the reporter on this story: Margot Habiby in Dallas at mhabiby@bloomberg.net
