MARKET WATCH
Energy prices continue to climb

Sam Fletcher
Senior Writer

HOUSTON, June 16 -- Energy prices continued to climb June 15 after new Federal Reserve Chairman Ben S. Bernanke told the Economic Club of Chicago that expectations for US consumer price growth are within historical ranges.

"In the short run, prices are likely to remain high in an environment of strong world economic growth and a limited ability to increase energy supplies. Moreover, prices are likely to be volatile in the near term, given the small margins of excess capacity to produce crude oil or natural gas that traditionally have buffered short-run shifts in supply and demand," said Bernanke.

However, he said, "In the long run, market forces will respond. The higher relative prices of energy will create incentives for businesses to create new, energy-saving technologies and for energy consumers to adopt them. The market for alternative fuels is growing rapidly and will help to shift consumption away from petroleum-based fuels. Government can contribute to these conservation efforts by working to create a regulatory environment that encourages the growth in energy supplies in a manner that is consistent with our nation's environmental and other objectives. Given the extraordinary resilience of the US economy, I am confident our nation will be up to this challenge."

American Chemistry Council Pres. & CEO Jack N. Gerard said June 16 he is "intrigued" by Bernanke's comments on alternative energy. "Policymakers have called for doubling—or even quadrupling—the nation's production of ethanol and hydrogen in order to reduce demand for other fuels," Gerhard said. "It is vital to recognize that ethanol and hydrogen as well as clean power generation, clean diesel, lightweight vehicles, and energy-efficient materials all require large amounts of natural gas. If members of Congress support these alternative and clean energies, then they must support access to new sources of natural gas supply."

The latest rise in energy prices was led by natural gas with the July contract escalating by 61.7¢ to $7.21/MMbtu June 15 on the New York Mercantile Exchange. That was triggered by an Energy Information Administration report of a smaller-than-expected injection of 77 bcf of gas into US underground storage in the week ended June 9 (OGJ Online, June 15, 2006). Above-average temperatures through most of the central and eastern states are expected to boost demand for cooling 20% above average through June 22, said analysts at Enerfax Daily.

Petroleum prices
The July contract for benchmark US light, sweet crudes rose by 36¢ to $69.50/bbl on NYMEX, while the August contract increased by 31¢ to $69.93/bbl. On the US spot market, West Texas Intermediate was up 36¢ to $69.50/bbl. Gasoline for July delivery increased 0.37¢ but was still essentially unchanged at $2.04/gal on NYMEX. Heating oil for the same month inched up by 0.1¢ but was virtually unchanged at $1.94/gal.

In London, the July IPE contract for North Sea Brent crude gained 45¢ to $67.43/bbl. The July gas oil contract was up by $5.25 to $618.75/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes increased by 44¢ to $63.10/bbl on June 15.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

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...

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...

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...

Statoil to delay development of Johan Castberg, Snorre 2040 projects

03/06/2015 Statoil ASA and its respective partners have reported the postponement of the development of both the Johan Castberg and Snorre 2040 field projects...

BP, partner complete $12-billion deal to develop Egypt gas

03/06/2015 BP PLC and a local partner have signed final agreements for the West Nile Delta (WND) natural gas project in Egypt, whereby $12 billion will be inv...

Tap Oil starts review of divestment options

03/06/2015 Tap Oil Ltd., Perth, has begun a strategic review of its divestment options, which is being held in the shadow of a boardroom leadership challenge ...

MARKET WATCH: NYMEX prices fall on strengthening dollar

03/06/2015 Oil prices fell modestly on the New York market Mar. 5, which analysts attributed to concerns about an unexpected increase in US gasoline supplies ...
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