Oil prices drop below $67 a barreladmin
Crude oil prices plunged below $67 a barrel in Asian trading Friday after a U.S. inventory report showed that higher refinery production was helping boost gasoline and distillate inventories.
Light, sweet crude for October delivery dropped 52 cents to $66.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract on Thursday fell 18 cents to settle at $67.32 a barrel, the lowest closing price for a front-month contract since April 5.
October Brent crude on London’s ICE futures exchange fell 54 cents to $65.99 a barrel.
Also easing supply worries was the possibility that BP PLC could restore lost Alaskan production at Prudhoe Bay back on line by the end of October as well as the resumption of some oil production in Nigeria.
U.S. crude inventories fell 2.2 million barrels last week to 330.6 million barrels, the U.S.
Department of Energy’s Energy Information Administration said Thursday. That was steeper than the 1.1 million barrel decline that analysts surveyed by Dow Jones had expected. However, the inventories remain 6.2 percent above year-ago levels.
Gasoline inventories rose by 700,000 barrels to 206.9 million barrels, which is 6.6 percent above year-ago levels.
Distillate fuel inventories rose by 3.1 million barrels to 139.9 million barrels ”” a bigger build than most analysts expected. They are now slightly above were they were a year ago.
BP PLC officials testified to lawmakers on Thursday about the company’s operational lapses in Alaska ”” a big oil spill in March and the partial shutdown of the country’s largest oil field. Until last month’s partial shutdown, Prudhoe Bay had been producing roughly 400,000 barrels per day, or 8 percent of total U.S. output. BP is currently pumping 220,000 barrels a day. Steve Marshall, the president of BP Exploration Alaska Inc., said output could be fully restored as early as the end of October.
Additionally Royal Dutch Shell PLC said Thursday it was putting 180,000 barrels of crude per day back on line in Nigeria, according to Dow Jones Newswires. Shell had taken the oil supply off line July 20 following a construction accident that damaged a key pipeline. Nigeria, Africa’s largest oil producer, has cut about a fifth of its usual production because of militant attacks.
Heating oil fell 1.02 cents to $1.8774 a gallon while gasoline prices declined 1.02 cents to $1.6315 a gallon. Natural gas futures slipped 3.8 cents to $5.680 per 1,000 cubic feet.