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

BLM decision clears way for first NPR-A federal oil production

02/16/2015 The US Bureau of Land Management issued a record of decision (ROD) for the proposed Greater Mooses Tooth One project (GMT1), which cleared the way ...

Goliat FPSO departs South Korea for Norway

02/16/2015 The world’s largest cylindrical floating production, storage, and offloading facility has departed the Hyundai Heavy Industry (HHI) Ulsan yard in S...

Alberta's premier seeks more North American energy integration

02/16/2015 Better policy integration and cooperation will be needed for Canada, Mexico, and the US to fully realize the North American energy renaissance's po...

CNOOC cuts capital budget, starts production from Jinzhou 9-3

02/16/2015 CNOOC Ltd. is slashing its capital budget for 2015 by 26-35% to $11.25-12.86 billion compared with last year's budget. Capital expenditures for exp...

Watching Government: New York moves ahead on LNG

02/16/2015 New York, a state more often associated with fiercely resisting unconventional natural gas exploration and production, established a program to reg...

BG's 2015 budget 'significantly lower' than 2014

02/16/2015 BG Group plans capital expenditures on a cash basis of $6-7 billion in 2015, a range it says is "significantly lower than 2014" due to &q...

BP trims capital budget by $4-6 billion

02/16/2015 BP PLC plans an organic capital expenditure of $20 billion in 2015, down from the previous guidance of $24-26 billion. Total organic capital expend...

Deloitte studies oil supply growth for 2015-16

02/16/2015 A Deloitte MarketPoint analysis suggested large-field projects, each producing more than 25,000 b/d, could bring on 1.835 million b/d in oil supply...

Vaalco reports results from Etame 10-H development well

02/13/2015 Vaalco Energy Inc., Houston, reported start of production from its Etame 10-H development well, the second such well drilled from the recently inst...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


Emerson Micro Motion Videos

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