MARKET WATCH
Crude futures prices continue to fall

Sam Fletcher
Senior Writer

HOUSTON, Sept. 6 -- Crude prices continued dropping toward a 3-month low Sept. 5 on the New York market, but the October natural gas contract increased, after falling in the previous three sessions, as Tropical Storm Florence formed in the Atlantic.

Florence is expected to strengthen into a hurricane, but forecasters said it is too soon to tell whether the sixth-named storm of the 2006 season would reach the US. "A hurricane making landfall would have a pronounced effect on natural gas prices; however, Tropical Storm Florence is expected to miss the Gulf of Mexico, which is a source of one fourth of US oil output, according to a government forecast," said J. Marshall Adkins in the Houston office of Raymond James & Associates Inc.

September marks the usual peak of the US hurricane season when historically 40% of Atlantic basin storms have formed.

Oil market factors
"Oil prices are dropping to a 3-month low around $68/bbl, as prospective [United Nations] sanctions are expected to have little impact on Iran's oil shipments," Adkins said. "Militaristic efforts to curb Iran's uranium enrichment are not seen as a viable option for the adverse impact they might have on the oil production from the world's fourth-largest oil producer. Sanctions may be imposed instead, as Iran failed to meet an Aug. 31 deadline to halt the enrichment."

In a separate report, Robert S. Morris, Banc of America Securities LLC, New York, said: "The two critical factors underpinning the ultimate path for oil prices should be the strength of the US and global economies, and the extent of global geopolitical tensions, most notably the nuclear stand-off with Iran. Perhaps most surprising has been the resiliency of US gasoline demand with prices remaining above 3% of per capita disposable income since late-March. Importantly, although the US economy does appear to be decelerating, it is not an abrupt slowdown and continues to expand."

Energy prices
The October contract for benchmark US light, sweet crudes lost 59¢ to $68.60/bbl Sept. 5 on the New York Mercantile Exchange. The November contract dropped 60¢ to $69.77/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down by 59¢ to $68.61/bbl. Heating oil for October deliver declined by 3.11¢ to $1.94/gal on NYMEX. Unleaded gasoline for the same month fell by 8.79¢ to $1.65/gal.

"Emphasis is shifting away from gasoline as the nation looks forward to winter and the need for heating oils," said Adkins.

The October natural gas contract recovered 16.2¢ to $6.04/MMbtu Sept. 5 on NYMEX after dropping a total 99.9¢ in the previous 3 sessions. "Whereas we were forecasting just a few months ago that domestic storage levels would exceed 3.6 tcf at the start of the upcoming winter, after a nearly 15% hotter-than-normal summer, our models now project that storage at the start of November will be around 3.45 tcf, which is still near the highest mark ever at the start of the traditional withdrawal season," said Morris. "With normal weather, we expect natural gas prices will remain below residual fuel oil prices through the winter but, importantly, project that they will shift back to be between residual and distillate fuel oil prices at some point next summer."

In London, the October IPE contract for North Sea Brent crude gained 38¢ to $68.09/bbl. The September gas oil contract increased $3.50 to $621.75/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes lost 59¢ to $63.54/bbl on Sept. 5.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

EIA: Eagle Ford, Bakken oil production to fall in April

03/10/2015 US shale oil production is expected to increase by a mere 1,000 b/d from March to April, according to the Energy Information Administration’s Drill...

Low crude prices alter challenges in sub-Saharan Africa, speakers say

03/10/2015 Significantly lower crude oil prices have reduced foreign companies’ interest in developing oil and gas resources in sub-Saharan Africa nations, sp...

Cairn Energy disputing Indian tax claim

03/10/2015 Cairn Energy PLC, Edinburgh, is disputing a tax claim by the Indian government for $1.6 billion related to the 2006 reorganization of its former In...

EIA: Monthly average Brent price up for first time in 8 months

03/10/2015 North Sea Brent crude oil prices averaged $58/bbl in February—up $10/bbl from the January average—representing the first monthly average price incr...

Pemex advances low-sulfur fuels project at Minatitlan refinery

03/10/2015 The first phase of an ultralow-sulfur fuels project is proceeding as planned and without delay at Petroleos Mexicanos’ (Pemex) 185,000-b/d Lazaro C...

Tap Oil awarded two blocks on North West Shelf

03/10/2015 Tap Oil Ltd. has been awarded 100% interest in Blocks W14-7 and W14-16 in the prospective Barrow and Dampier sub-basins on the North West Shelf as ...

API is examining dilbit’s environmental impacts when released

03/10/2015 The American Petroleum Institute is studying the properties of diluted bitumen (dilbit) and expects to develop findings about how oil sands crude b...

Dunn named president of Questar Pipeline

03/10/2015 Micheal Dunn has been named executive vice-president of Questar Corp., Salt Lake City, and president of the company’s interstate pipeline subsidiar...

MARKET WATCH: NYMEX crude oil prices rebound to $50/bbl

03/10/2015 Crude oil futures settled higher on the New York market Mar. 9, and the contract for April delivery reached $50/bbl after falling sharply in previo...
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

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


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


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