Oil price stalls on mixed reports

The price of oil continued to tread water in the first week of the third quarter as dueling influences of increased U.S. production and dropping domestic storage compete for the greatest control on the market.

Domestic benchmark West Texas Intermediate crude gained almost $2 a barrel Monday, but gave muchof it back after Independence Day on new reports that Russia and Libya are opposed to deeper production cuts.

The price jumped again Thursday morning after a report from the U.S. Energy Information Administration stated that the country’s commercial oil storage level fell by a largerthan-expected 6.3 million barrels last week to 502.9 million barrels. Stocks still are up 9.2 million barrels from 493.7 million barrels one year ago.

Cushing — home to the country’s largest commercial storage hub — saw storage levels drop by 1.3 million barrels to 59.5 million barrels, down 4.6 million barrels from 64.1 million barrels one year ago.

Thursday’s price rally lost steam later in the afternoon, but oil still closed up 39 cents at $45.52 a barrel.

At the pumps

Gasoline stocks also fell last week. The motor fuel’s storage levels dropped by 3.7 million barrels in the latest report to 237.3 million barrels. Gasoline production increased to 10.4 million barrels a day, up from 10.3 million barrels per day one week ago.

Two weeks of storage declines around Independence Day likely is part of the reason for a small increase in gasoline prices, which are up about a nickel in Oklahoma City over the past week and up more than two cents nationwide over the same period.

Oil company executives have said they expected the oil price to remain relatively flat for much of the year, but many also have said they would reevaluate drilling programs at midyear based in part on price forecasts.

Local executives so far have downplayed the stalled price, saying they are continuing to cut costs and improve drilling operations, allowing them to be profitable at lower commodity prices.

The oil price is down about 18 percent from the first of the year, despite continued production cuts by the Organization of Petroleum Exporting Countries and Russia.

While oil prices have slid, natural gas isn’t helping local producers. Natural gas prices rallied more than 17 percent from mid-February to mid-May, but has tumbled 61 cents over the past six weeks.

The fuel gained a nickel Thursday to close at $2.89 per thousand cubic feet.