MARKET WATCH
Inventory build pushes down energy prices

Sam Fletcher
Senior Writer

HOUSTON, Dec. 23 -- Energy prices fell in light trading Dec. 22 as traders reacted to a surprisingly bearish report on US petroleum inventories during the last full session before the extended Christmas holiday weekend on the New York Mercantile Exchange. NYMEX was scheduled to close early Dec. 23 and remain closed Dec. 24.

Traders had expected a slight decline in US petroleum stocks after a period of colder-than-normal weather. However, the Energy Information Administration said Dec. 22 that commercial US inventories of crude increased by 2.1 million bbl to 295.9 million bbl during the week ended Dec. 17. Distillate fuel inventories were up by only 600,000 bbl to 119.9 million bbl, while US gasoline inventories increased by 1.8 million bbl to 211.4 million bbl (OGJ Online, Dec. 22, 2004).

Meanwhile, US military officials now suspect that a suicide bomber, not a rocket attack, killed 22 solders and civilians and wounded more than 60 others in a Dec. 21 attack on a mess tent at a military base near Mosul, Iraq (OGJ Online, Dec. 21). Analysts said the Dec. 22 fall in energy commodity prices could have been steeper had it not been checked by fears of increased violence in Iraq prior to upcoming elections.

In other news, the Royal Dutch/Shell Group on Dec. 22 declared force majeure on disrupted deliveries of 114,000 b/d of Nigerian Bonny Light crude as a result of the occupation by villagers of oil platforms in the Niger Delta earlier this month. Hundreds of villagers occupied two Shell and one CheveronTexaco Corp. platforms Dec. 5 but subsequently retreated. Nevertheless, Shell said the resulting production stoppage would impact export operations through the rest of December, January, and part of February.

Energy prices
The January contract for benchmark US light, sweet crudes fell by $1.52 to $44.24/bbl Dec. 22 on NYMEX, while the February position lost $1.46 to $44.33/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by $1.51 to $44.05/bbl. Heating oil for January delivery dropped 4.09¢ to $1.36/gal on NYMEX. Gasoline for the same month retreated by 2.13¢ to $1.15/gal. The January natural gas contract dipped by 3.6¢ to $6.82/MMbtu.

In London, the February contract for North Sea Brent crude lost $1.73 to $40.56/bbl Dec.22 on the International Petroleum Exchange.

The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes declined by 85¢ to $37.41/bbl on Dec. 22.

Contact Sam Fletcher at samf@ogjonline.com

Related Articles

Murkowski, Heitkamp lead Senate call for crude exports to Mexico

02/18/2015 US Sens. Lisa Murkowski (R-Alas.) and Heidi Heitkamp (D-ND) led a coalition asking US Sec. of Commerce Penny Pritzker in a Feb. 18 letter to encour...

Pemex cuts budget by $4 billion

02/18/2015 The board of Petroleos Mexicanos (Pemex) has approved a $4-billion budget reduction for 2015, an 11.5% decrease compared with the previous expendit...

US should rework Azerbaijan relations carefully, House panel told

02/18/2015 The US should pursue relations with Azerbaijan that recognize its strategic importance as an energy supplier to countries farther west but do not i...

Pemex lets contract for Salamanca refinery amid budget cuts

02/18/2015 Mexico’s Petroleos Mexicanos (Pemex), through a contractor, has let a contract to SENER Ingeniería y Sistemas SA, Mexico City, a division of SENER ...

Magnum Hunter slashes budget by 75%

02/18/2015 Magnum Hunter Resources Corp., Houston, plans a $100 million upstream capital expenditure budget for 2015, down from the $400 the company planned f...

Gulf Coast Western buys interest in Smackover acreage in South Alabama

02/18/2015 Gulf Coast Western LLC (GCW), Dallas, has acquired a large working interest in a block of leases covering 29,000 acres in Conecuh and Covington cou...

MARKET WATCH: NYMEX crude oil prices close above $53/bbl

02/18/2015 US light, sweet crude oil prices for March delivery closed above $53/bbl on the New York market Feb. 17 after the market was closed on Feb. 16 for ...

BP Energy Outlook projects global energy demand to jump 37% by 2035

02/17/2015 Global demand for energy is expected to rise by 37% from 2013 to 2035, or by an average of 1.4%/year, due in large part to ongoing economic expansi...

MARKET WATCH: Brent crude oil reaches above $62/bbl

02/17/2015 The April ICE contract for Brent crude oil prices rose modestly in London to settle above $62/bbl on Feb. 16 while the New York Mercantile Exchange...
White Papers

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...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by
Available Webcasts

On Demand

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


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

register:WEBCAST


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

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