New York sees a huge drop in Oil And Gas Prices
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New York sees huge drop in Oil and Gas Prices

New York sees huge drop in Oil and Gas Prices

Crude oil and natural gas prices in New York are dropping, according to the latest reports. The crude oil futures contract on the 12th of October closed at a rate lower than was expected. With weather conditions easing up and natural gas reserves expected to grow, natural gas prices in New York too have dropped, at a rate of 3.6%.

These falls, however, come in sharp contrast to the Standard & Poor’s 500 index, which has once again shown an upward swing, the sixth rise in seven sessions.

Crude oil prices experienced a surge as a result of the diminishing value of the US dollar, but the trend quickly came to an end as the price increase failed to sustain till the market close. Crude oil trade through the year 2011 has been parallel to the functioning of the Standard & Poor’s 500 index, for the most part.

According to API reports, the crude oil stocks experienced a decline of 3.8 million bbl to 340.4 million bbl  at the market close of the week of 7th October. Gasoline stock fell at an estimated 1.2 million bbl to 211.2 million bbl. Distillate stocks were also affected, with a decline of 3.1 million bbl to 151.9 million bbl.

The crude oil refining margins of the US Gulf Coast and the European market experienced a steep drop, whereas the Singapore market margin sustained surprisingly well, despite the fact the Shell refinery based in Singapore has once again opened up operation, on a limited scale.

According to Energy Information Administration reports, US purchase (import) of crude oil surged, rising from 386,000 b/d to 9.1 million b/d the previous week. The average size of US crude oil import for a four-week span was estimated to be 9 million b/d, which is 115,000 b/d greater than the relative period last year.

EIA, under the aegis of the Department of Energy, has also stated that the commercial inventory of crude oil for the United States has seen a significant growth, nonetheless. The reported increase measures 1.3 million bbl to 337.6 million in the week of 7th October. Stocks for gasoline, however, have dropped 4.1 million bbl as blending components as well finished gasoline both decline.

According to industry experts, the restrictions experienced by the market since the month of August have resulted in a severe backward curve. As European oil markets and refining margins continue to drop, a new trend of holding back is emerging amongst the refineries, with more and more of them choosing to stay away from purchasing any crude oil or crude oil stocks at the moment.

Industry pundits expert natural gas prices and crude oil stocks to decline in value until the market sees a turnaround.

 

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One Comment

  • Crude Oil Prices Drop Despite Projections of Stable Demand | Industry Leaders Magazine says:

    […] in China, and continuing instability in Europe, oil prices dropped yesterday to under $97 a barrel. Crude oil prices are falling despite stronger demand from the U.S and China and a decrease in oil supplies in the […]

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