Oil prices continued have continued to climb this week and are now $3-4 a barrel higher than at the beginning of April. New York oil futures closed Wednesday at $103.60 a barrel, only $4.38 below London futures which closed at $107.98. Falling gasoline stocks in the US and a weaker dollar contributed to the increase in NY prices, while uncertainty about the Ukrainian and Libyan situations supported London oil prices.
As expected the reopening of the Houston Ship Channel resulted in a jump in US imports and higher US crude inventories. The surprising developments in the weekly stocks report was a 5.1 million barrel drop in US gasoline inventories and the first increase in 12 weeks of the stocks at Cushing, Okla. that have been steadily draining away to storage facilities along the Gulf Coast. Stocks along the coast are now at an all-time high of 202 million barrels and may not be in a position to accept much more oil from Cushing until a way is found to ease the glut.
Only 13 US owned and crewed tankers out of a global inventory of 2,400 are legally allowed to move oil between US ports and these are fully booked. The 1975 Act forbids exports of crude except to Canada so the glut along the coast may remain until more refineries come back online from maintenance and begin to produce more oil products for the US market and for export. Some are already predicting that the new glut will increase the WTI/Brent spread to $13 a barrel soon from the current $5 a barrel.  The coastal oil glut is increasing pressure on Congress to change the law and permit crude exports despite the 7 million b/d that the US is currently importing.  It is generally recognized that oil producers would gain if US crude can be sold at world prices and refiners and consumers would lose.
Natural gas traders are split was to whether the industry will be able to refill the US storage caverns in time for next winter. Analysts expect there will be a small increase in US inventories in this week’s inventory report as last week was relatively mild, but more cold weather is forecast for the next two weeks so that the winter drawdown in gas stocks might not be over until nearly May this year. After that, summer temperatures, the rate of natural gas production and what happens next winter will determine whether natural gas comes into short supply.
Overseas the return of Libyan exports is still up in the air. Only one of four shuttered export terminals has been turned over to the government and this cannot start loading crude until Sunday at the earliest. The Libyan situation is still far from over. Both sides in the Iranian nuclear talks report progress although the US has banned the new Iranian ambassador to the UN from entering the country and there is considerable concern about the deal that Moscow and Tehran are said to be cooking up to help Iran avoid the oil sanctions.
The usual bombings continue in Iraq while Baghdad announced that there will be no parliamentary voting on April 30th in those parts of Anbar province that have been seized by Sunni insurgents and clashes with security forces continue.
Nigerian oil exports for May will be down to about 1.6 million b/d from the high of 2.2 million reached in 2011 due to various acts of sabotage and oil theft that are plaguing the industry. A major gasoline shortage continues in the country.