MARKET WATCH
London bombs deflate energy prices

Sam Fletcher
Senior Writer

HOUSTON, July 8 -- The July 7 terrorist bomb blasts that killed at least 49 people and wounded hundreds more in London also blew energy futures prices off the record highs set in the previous trading session.

With the first news of the attacks, the August contract for benchmark US light, sweet crudes plummeted from an intraday high of $62.10/bbl to a low of $57.20/bbl before rebounding to $60.73/bbl, down just 55¢ for the day, on the New York Mercantile Exchange.

Some traders obviously feared that the terrorist attacks on three subway trains and a bus would trigger at least a general fear of travel, if not an economic downturn, that would affect global demand for energy. Crude prices fell 40% in the months following the Sept. 11, 2001, terrorist attacks on New York and Washington, DC.

However, Paul Horsnell, Barclays Capital Inc., London, reported July 8, "There are times when a market response should not be over-rationalized. That [July 7] response is typical of what a fairly febrile market can do when faced with a shock, and the sharp fall was a major overshooting. In our view, to have at the time put that response down to views on the likely impacts of global growth and oil demand would have been at best disingenuous."

Some said energy markets also were adversely affected by a large build in commercial US inventories of distillate fuel during the week ended July 1(OGJ Online, July 7, 2005).

Hurricane strengthens
Meanwhile, Hurricane Dennis, a powerful Category 4 storm with sustained winds of 150 mph, was still strengthening as it approached Cuba on July 8. Although forecasters expect the storm to weaken slightly after making landfall in Cuba, it still will be a major hurricane when it enters the Gulf of Mexico.

The National Hurricane Center in Miami, Fla., said the storm still threatens the US Gulf Coast from Florida to Louisiana.

The US Minerals Management Service said 81 offshore platforms and 35 rigs were evacuated ahead of the hurricane as of July 8. It said production of 220,326 b/d of oil and more than 1 bcfd of natural gas had been shut in. The MMS may close its Gulf of Mexico regional office in New Orleans on July 11 because of the storm, officials said. Meanwhile, it has activated a continuity of operations plan that involves opening a temporary office in Houston.

Other energy prices
The September contract for US crudes lost 45¢ to $61.68/bbl July 7 on NYMEX. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by 55¢ to $60.74/bbl. Heating oil for August delivery lost 1.99¢ to $1.77/gal on NYMEX. However, gasoline for the same month continued climbing to a new record closing of $1.81/gal, up by 1.57¢ for the day.

The August natural gas contract plunged by 29¢ to $7.40/MMbtu, "hit by a steady stream" of profit taking after a 3-day run up in prices. Those holding open purchase positions that obligates the holder to take delivery on contracts "bailed on concerns that the storm track for Hurricane Dennis might be shifting east towards Florida and away from the natural gas platforms" in the central Gulf of Mexico, said analysts July 8 at Enerfax Daily.

In London, the August contract for North Sea Brent crude lost 57¢ to $59.28/bbl on the International Petroleum Exchange.

The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes inched up by 2¢ to $54.82/bbl on July 7.

Contact Sam Fletcher at samf@ogjonline.com

Related Articles

Transco seeks FERC approval for New York Bay Expansion project

07/09/2015 Transcontinental Gas Pipe Line Co. LLC (Transco), a wholly owned subsidiary of Williams Partners LP, has filed an application with the US Federal E...

House Oversight panel subpoenas Kerry for Keystone XL documents

07/09/2015 The US House Oversight and Government Reform Committee issued a subpoena to US Sec. of State John F. Kerry for reports, recommendations, letters, a...

MARKET WATCH: NYMEX crude oil prices drop for fifth consecutive trading session

07/09/2015 US light, sweet crude oil prices settled slightly lower on the New York market July 8 for the fifth consecutive trading session, and analysts attri...

Ending crude export ban would help rural US areas, House panel told

07/09/2015 Rural US communities generally have benefited from the nation’s crude oil production renaissance, and potentially could be helped more if restricti...

MOL completes Ithaca Norge acquisition

07/09/2015 MOL Group, Budapest, has completed its acquisition of Ithaca Petroleum Norge from Ithaca Energy Inc. for $60 million plus possible bonuses of up to...

Courts less deferential to regulatory agencies, GMU forum told

07/08/2015 US Supreme Court decisions in the recently completed term suggest that judicial deference to federal regulatory agencies is starting to recede, spe...

AER orders Apache Canada to address integrity of pipeline system

07/08/2015 Alberta Energy Regulator has directed Apache Canada Ltd. to address the integrity of its pipeline management system because of “failure to follow p...

API releases pipeline safety recommended practice

07/08/2015 The American Petroleum Institute released a pipeline safety recommended practice that it developed with engagement from the US Pipeline and Hazardo...

MARKET WATCH: Brent oil prices climb; NYMEX oil price holds below $53/bbl

07/08/2015 US light, sweet crude oil prices settled slightly lower on the New York market July 7 to remain under $53/bbl as Brent crude oil prices gained mode...
White Papers

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

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
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

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