New York oil futures traded around $82 a barrel this week until Wednesday’s stocks report showed an unexpected 7 million barrel jump in US crude stocks. The jump resulted in a nearly $2 decline in the futures market to a close of $80.52 a barrel, the lowest settlement since June of 2012. London’s crude, which had been trading around $86 slid $1.51 on Wednesday to a close of $84.71. Refinery maintenance is in full swing with utilization down to 86.7 percent, the lowest since March, as changeover to winter blends continues. Refinery maintenance, the primary cause of the crude inventory build, is now at its peak, but should be over in a few weeks. Gasoline inventories fell last week due to less production, but distillates increased as demand for heating oil and diesel is currently weak.
US natural gas futures fell to a new 11-month low on Wednesday as traders are expecting that Thursday’s report will show that a larger than normal amount of gas was injected into storage last week. Mild weather, with minimal demand for heating gas, is expected to continue across the US for the next couple of weeks and long-range forecasts are predicting that really cold weather will not settle in across the US until January.
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