MARKET WATCH
NYMEX oil futures prices tumble on record imports

By OGJ editors

HOUSTON, Apr. 24 -- Energy futures prices tumbled on the New York Mercantile Exchange Wednesday after the US Energy Information Administration's report of a massive build in crude stocks caused by record imports.

The inventory surge came as the Organization of Petroleum Exporting Countries met Thursday.

OPEC agreed to reduce actual OPEC production by 2 million b/d to 25.4 million b/d, effective June 1. That decision will be reviewed during a June 11 special meeting in Doha, Qatar.

In the interim, OPEC said it will closely monitor the market, in particular the timing and level of the expected recovery in Iraqi oil production and its impact on the overall supply-demand balance in the market.

Meanwhile, EIA data released Wednesday showed crude oil stocks up 9 million bbl for the week ending Apr. 18. The climb was attributed to an increase in imports of 1.209 million b/d. Total weekly imports were 10.614 million b/d.

The report surprised traders, who had expected a modest increase. Traders said the inventory numbers dampened prices as the nation enters the high-demand summer driving season.

The June contract for benchmark US light, sweet crudes plunged $1.34 to $26.65/bbl Wednesday on the New York Mercantile Exchange, while the July position lost $1.15 to $26.33/bbl.

Refined products also ended lower. Unleaded gasoline for May delivery declined 2.93¢ to 84.81¢/gal. Heating oil for the same month dropped 2.79¢ to 75.07¢/gal.

Natural gas
The May natural gas contract declined by 7.6¢ to $5.57/Mcf on NYMEX. Enerfax Daily said gas prices declined along with oil prices in early trading Wednesday, and then gas prices fell into a holding pattern for much of the trading session.

"But few predict much downside near term despite milder weather forecasts, expecting longer-term bullish fundamentals like sagging production and record low storage to underpin prices heading into the summer cooling season," Enerfax Daily reported Thursday.

Natural gas storage injections totaled 61 bcf for the week ended Apr. 18. The 61 bcf was was above the 5-year average of 25 bcf but below last year's 69 bcf injection number for the same period.

The latest results were higher than the Banc of America LLC's estimates of 45-48 bcf injection, said analyst James K. Wicklund.

He said that refilling storage remains problematic, adding that injections still need to average more than 20 bcf/week above the 5-year average to get storage levels back to 3 tcf.

"As a result, if drilling activity does not pick-up to counter. . .declines in natural gas production, refilling storage before next winter becomes problematic. Companies' belief of sustainable prices, not higher gas prices, is needed to continue to boost activity, and with a gas price futures curve averaging above $4.50 through April 2009, we remain optimistic on the long-term natural gas fundamentals," Wicklund said.

The US drilling rig count is up 17% from Jan. 1, and that needs to be sustained, he said. Meanwhile, the industry anticipates that the US rig count will continue climbing.

"The most likely scenario is continued increased drilling to try and balance the economics of natural gas supply and demand," Wicklund said.

IPE prices
In London, the June contract for North Sea Brent oil settled at $24.26, down $1.20 from Tuesday's close on the International Petroleum Exchange. The May natural gas contract dipped slightly by 0.2¢ to the equivalent of $2.60/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes slipped $1.1¢ to $25.14/bbl Wednesday.

Related Articles

US Forest Service takes no stance on fracturing in national forest

12/12/2014

The US Forest Service has dropped a proposal that would have banned hydraulic fracturing in the George Washington National Forest.

Frac ban exemption made in Broomfield

12/12/2014 A Colorado District Court judge has ruled that a hydraulic fracturing ban in Broomfield, Colo., does not apply to an operator that entered into an ...

OSHA seeks to limit silica exposure for oil workers, Proposed rules target frac sand mining, fracturing

12/12/2014 The rapid growth in oil and gas production from shale and tight oil formations in the US is generating a boom in a related industry: frac sand. San...

Study links methane contamination in water wells to poor well construction-not fracing-in Marcellus

12/12/2014 A new study found that fugitive gas contamination at eight clusters of water wells in the Marcellus and Barnett shale regions might be linked to we...

Weak crude prices could threaten Bakken production growth

12/12/2014 Bakken shale production set another record in August, but weakening crude prices and flaring reduction efforts threatened to temper production grow...

Husky reports start of steam operations at Sunrise oil sands project

12/12/2014

Husky Energy, Calgary, reported the start of steam operations at the in situ Sunrise Oil Sands Project in northeastern Alberta.

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

register:WEBCAST


Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected