MARKET WATCH
Energy prices climb with gasoline rally

Sam Fletcher
Senior Writer

HOUSTON, June 17 -- Energy prices continued to climb, sparked by a June 16 rally of gasoline futures in the New York market.

Still, US Energy Sec. Samuel Bodman said members of the Organization of Petroleum Exporting Countries were "responsible and responsive" in raising the group's production quota by 500,000 b/d to 28 million b/d effective July 1. Oil markets dismissed that move as merely symbolic, however, since it only raises OPEC's quota to its present level of overproduction without adding any new crude supplies.

After meeting June 16 in Oslo, Mexico's Secretary of Energy Fernando Elizondo Barragan and Norwegian Oil Minister Thorhild Widvey said their countries have no spare production capacity and there is nothing they can do to help ease crude oil prices.

Meanwhile in the futures market, the July crude contract and calendar 2010 crude were recently trading at the same level of $55/bbl, said Amanda Lee, an analyst in the New York office of Deutsche Bank AG, in the bank's June 17 Commodities Weekly report. "Crude oil is therefore trading as if it is a financial asset rather than a commodity, as record high prices at the back end have pushed this part of the curve into contango and hence further away from mean reverting levels," she said. "Robust demand growth, disappointing non-OPEC supply, limited spare production capacity, and heavily stretched refining capacity are cited for stronger oil prices. However, it appears unrealistic to expect these forces to persist for the next 5 years to justify crude oil above $55/bbl."

Energy prices
The July contract for benchmark US light, sweet crudes shot up by $1.01 to $56.58/bbl June 16 on the New York Mercantile Exchange, with the August contract escalating by $1.02 to $57.43/bbl. Gasoline for July delivery jumped by 3.53¢ to $1.60/gal on NYMEX. Heating oil for the same month inched up by 0.44¢ to $1.63/gal.

The July natural gas contract climbed by 17.2¢ to $7.61/MMbtu on NYMEX after the Energy Information Administration reported an expectedly small injection of 73 bcf of gas into US underground storage in the week ended June 10. "There was an upward bias [in the natural gas futures market] before the EIA number came out, but a speculative flurry of buying after it was released," said analysts at Enerfax Daily.

In London, the new front-month August contract for North Sea Brent crude gained 98¢ to $56.22/bbl on the International Petroleum Exchange.

The average price for OPEC's new basket of 11 benchmark crudes was up by 15¢ to $50.18/bbl on June 16.

Contact Sam Fletcher at samf@ogjonline.com

Related Articles

Sasol takes more cost-cutting measures as oil prices stay low

03/09/2015 Sasol Ltd. hopes to cut $2.5-4.1 billion over a 30-month period, using Dec. 31 as the baseline, in response to what is describes as the “lower-for-...

Outlook for US industrial gas use trimmed

03/09/2015 Industrial demand for natural gas in the US will rise to 22.1 bcfd in 2020 from 19.8 bcfd in 2012, according to an updated analysis of projects in ...

Ecopetrol appoints Echeverry as chief executive officer

03/09/2015

Ecopetrol SA reported it has appointed Juan Carlos Echeverry as its chief executive officer, effective Apr. 6.

Cairn India cuts spending to $500 million for FY 2016

03/09/2015 Cairn India Ltd. reported it will cut its capital spending to $500 million from the previously projected $1.2 billion for fiscal year 2016, which b...

Fire hits Pemex’s Tula refinery

03/09/2015 Petroleos Mexicanos (Pemex) is investigating a fire that took place on Mar. 6 at the resid hydrodesulfurization plant of its 315,000-b/d Miguel Hid...

GOP senators ask Obama to stop attacks on OCS revenue sharing

03/09/2015 Seven Republican US senators asked US President Barack Obama to reconsider his proposal to deprive Gulf Coast states of a fair share of revenue fro...

MARKET WATCH: NYMEX prices fall on strengthening dollar

03/09/2015 Oil prices fell more than $1/bbl on the New York market Mar. 6 on a strengthening dollar, prompted by statistics showing the US employment rate was...

Pennsylvania governor proposes natural gas severance tax

03/09/2015 Pennsylvania Gov. Tom Wolf proposed a $29.9-billion budget on Mar. 3 that includes $2.5 billion of net tax increases for fiscal 2016, including a 5...

Watching Government: Why call-ups are continuing

03/09/2015 Western Energy Alliance members were fully aware that more significant federal onshore oil and gas policies are being developed in the nation's cap...
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