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OIL AND GAS
U.S. gas prices holding steady as summer fades
by Daniel J. Graeber
Washington (UPI) Aug 15, 2017


Oil prices move lower on seasonal pressures
Washington (UPI) Aug 15, 2017 - Crude oil prices moved deeper into negative territory early Tuesday as market watchers looked further out in the future to a pending slowdown in U.S. refining.

Crude oil prices suffered a dual blow Monday from steady, though at times shaky, production recovery in Libya and from a report of an expected increase in U.S. shale oil activity. The price for a barrel of oil dropped below $30 per barrel last year as gains in U.S. oil production added to supply-side concerns from members of the Organization of Petroleum Exporting Countries defending a market share with robust output.

OPEC in January adopted a measure to cap production to draw down global supplies, though Libya is exempt from the agreement because of national security concerns. U.S. oil production, meanwhile, remains resilient.

On the balance situation, a survey of analysts from S&P Global Platts revealed expectations of a 3.6 million drop in U.S. crude oil inventories and a 400,000 barrel decline for gasoline. For crude oil inventories, that leaves the surplus at 23 percent above the five-year average, down from the 34 percent reported at the end of March.

That would normally send crude oil prices higher, though Platts Oil Futures Editor Geoffrey Craig said traders are looking to the future.

"Oil futures have become lodged in a tight price range this month as traders await the autumn maintenance period that typically brings with it a seasonal drop in refinery demand and resulting build in crude stocks," he said in an emailed report.

The price for Brent crude oil was 0.75 percent lower than Monday's close to trade at $50.35 per barrel at 9:15 a.m. EDT. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.55 percent to $47.33 per barrel.

Oil prices are moving in a narrow band because OPEC's balancing act is offset in part by gains from the United States. Phil Flynn, senior market analyst for the PRICE Futures Group in Chicago, said in a daily emailed newsletter the leveling effect may be overstated because production growth isn't keeping up with demand.

"Growth pales to global demand growth that this winter could surge to record highs," he said.

The price of oil will be influenced late Tuesday afternoon when the American Petroleum Institute releases its data on oil and gasoline stockpiles. Official U.S. data is released late Wednesday morning.

U.S. retail gasoline prices are holding relatively stable, with analysts offering competing perspectives on the trend ahead as the demand-heavy summer wanes.

Motor club AAA reports a national average price for a gallon of regular unleaded gasoline at $2.35, relatively unchanged from last week, but more than 9 cents higher than one month ago.

By region, the West Coast remains the most expensive market in the country. California is still holding just below $3 per gallon, though it still has the highest state average for the Lower 48. AAA in its weekly retail market report said gasoline inventories remain low for the region and demand pressures are on pace to increase because the path of totality for Monday's eclipse runs through several West Coast states.

That tourist draw on gasoline comes about a month before the official end to the summer travel season and AAA spokesperson Jeanette Casselano said demand pressures should increase through September.

"As we get closer to Labor Day and demand and production rates grow, drivers will likely see some of the highest prices at the pump this year," she said in a statement.

The Great Lakes states, meanwhile, were the most volatile in the country. Most states posted an increase, though Indiana, Michigan and Ohio each saw big spikes in gasoline prices. The same three states were on last week's list of those with the largest declines. Regional gasoline supplies are low by relative standards, despite an influx of gasoline last week.

Total U.S. gasoline inventories showed an increase last week, which contributed to the holding pattern for retail prices. Last week saw U.S. exploration and production activity accelerate, which would push markets lower and Monday saw steep declines in crude oil prices because of lingering supply-side strains.

According to price-reporting company GasBuddy, a series of offsetting factors suggests some relief is in sight.

"Gasoline prices will be in a bit of a holding pattern in the week ahead, with declines likely to be more commonplace than increases as gas pumps have largely caught up to the current price of crude oil," an emailed report read.

OIL AND GAS
Iraq, Saudi Arabia express full commitment to OPEC balancing act
Washington (UPI) Aug 11, 2017
Oil production from Iraq and Saudi Arabia will remain subdued until the markets reach a target level that indicates a balanced market, leaders said. Saudi Prince Mohammed bin Salman bin Abdulaziz al-Saud hosted Iraqi Oil Minister Jabbar al-Luabi to discuss recent trades in shared oil policy. Saudi Arabia is the largest oil producer in the Organization of Petroleum Exporting Count ... read more

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