MARKET WATCH
Energy prices mixed as US inventories rise

Sam Fletcher
Senior Writer

HOUSTON, Feb. 24 -- Energy prices were mixed Feb. 23 following a report of continued increases in US inventories of crude and gasoline.

The US Energy Information Administration said commercial inventories of US crude increased by 1.1 million bbl to 326.7 million bbl in the week ended Feb. 17. US gasoline stocks inched up by 100,000 bbl to 225.6 million bbl, the highest level since June 4, 1999. Distillate fuel inventories dropped 1.3 million bbl to 135.6 million bbl in the same period. EIA subsequently reported the withdrawal of 123 bcf of natural gas from US underground storage in the week ended Feb. 17, compared with withdrawals of 102 bcf the previous week and 88 bcf during the same period last year. US gas storage now stands at 2.1 tcf, up by 370 bcf from a year ago and 694 bcf above the 5-year average (OGJ Online, Feb. 23, 2006).

Traders recently have shrugged off civil unrest that has curtailed Nigeria's production by 455,000 b/d, as well as confrontations between the US and Iran over Iran's proposed nuclear program.

However, they are more likely to react to a terrorist attack Feb. 24 on Saudi Arabia's Abqaig production and processing center. Saudi security and Saudi Aramco employees thwarted the attack by suicide bombers who stormed the plant in two cars. There was an explosion and brief fire at a pipeline, but operations were not affected, officials reported (OGJ Online, Feb. 24, 2006). That facility processes two-thirds of the kingdom's oil production and handles most of its crude exports through the Persian Gulf.

Meanwhile, EIA said it expects crude prices to remain relatively high despite large US inventories. With energy prices still in contango—with prices of subsequent monthly crude futures contracts progressively higher than the front-month contract, there's an economic incentive for inventory holders to store more oil as protection against possible supply disruptions.

In a separate report Feb. 24, Ronald J. Barone, managing director of equity research for the Natural Gas & Electric Utilities Group of UBS Securities LLC, New York, warned of additional mergers and consolidations of gas utilities this year. "As carrying costs have risen with higher gas prices early in the year and with gas consumption per customer falling off due to efficiency gains, many utilities have felt the pinch. In markets with an abundance of utilities but a limited customer base, consolidation appears to be the most favorable means of sustaining growth and surviving," he said.

Energy prices
The April contract for benchmark US light, sweet crudes lost 47¢ to $60.54/bbl on the New York Mercantile Exchange on Feb. 23. The May contract dipped by 21¢ to $62.04/bbl. On the US spot market, however, West Texas Intermediate at Cushing, Okla., increased by 31¢ to $58.33/bbl. Gasoline for March delivery gained 3.89¢ to $1.51/gal on NYMEX. Heating oil for the same month climbed by 1.05¢ to $1.66/gal.

The March natural gas contract bumped up by 17.5¢ to $7.46/MMbtu on NYMEX with short-covering erasing earlier losses as traders bought futures contracts to preserve gains in expiring options contracts, said analysts at Enerfax Daily.

In London, the April IPE contract for North Sea Brent crude advanced by 10¢ to $60.54/bbl. Gas oil for March gained $7.50 to $528.50/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes declined by 54¢ to $55.18/bbl.

Contact Sam Fletcher at samf@ogjonline.com.


Related Articles

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...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

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...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

MARKET WATCH: NYMEX crude oil price slides below $61/bbl

12/11/2014 Crude oil prices fell below $61/bbl for January delivery on the New York market Dec. 10 after the Organization of Petroleum Exporting Countries low...

MARKET WATCH: US crude oil prices rebound modestly awaiting inventory report

12/10/2014 Crude oil prices rose modestly on the New York market Dec. 9 while analysts awaited the US government weekly inventory report on crude oil and prod...

ExxonMobil forecasts 35% higher world energy demand by 2040

12/10/2014 A significantly bigger global middle class, expanded emerging economies, and 2 billion more people will contribute to 35% higher world energy deman...

MARKET WATCH: Crude oil prices briefly dip to 5-year lows

12/09/2014 Oil prices on the New York and London markets remained volatile, briefly trading around lows not seen since 2009 although prices were attempting to...

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