MARKET WATCH: Energy prices drop on mixed signs of US economy

Sam Fletcher
Senior Writer

HOUSTON, Dec. 10 -- Energy prices fell Dec. 7 among mixed reports on US employment that could leave the door open for another interest rate reduction when the Federal Open Market Committee, the policy-making arm of the Federal Reserve Bank, meets Dec. 11.

The US Department of Labor reported 94,000 nonfarm payroll jobs in November. A separate survey of households showed the strongest job growth in nearly 6 years, with 696,000 more people reporting they were employed in November. That kept the US unemployment rate steady at 4.7%.

"Crude is now 11% lower than its highs from late November and could drop further in the coming weeks. Investors continue to think that the Federal Reserve will cut rates and traders will be closely monitoring the decision. Natural gas is trading over 2% lower this morning as the 8-14-day forecast shows warmer than normal weather on the horizon," said analysts in the Houston office of Raymond James & Associates Inc.

Robert S. Morris, Banc of America Securities LLC, New York, reported, "After a volatile week, West Texas Intermediate spot oil prices ended up posting a 43¢/bbl decline even though the Organization of Petroleum Exporting Countries decided to not increase output and a sharp drop in US crude oil inventories was reported. Oil prices had posted a nearly 10% drop the prior week due largely to speculation that OPEC would announce an increase in production at last week's meeting. However, the cartel stated that the market was 'well supplied' and that there was never any discussion about boosting output. OPEC plans to meet again Feb. 1 in order to keep an eye on 'market uncertainties.'"

In Paris, analysts with Societe Generale Group said, "The markets have been weighed down by oil demand concerns in the last 2 weeks and recent data from the US continue to indicate weakness there." They noted, "Many oil market participants focus only on the weekly US data and ignore the monthly data because of the 2-month time lag for the latter. However, US final monthly data is more accurate than the preliminary weekly data; importantly, this year, a strong pattern of downward revisions in the monthly figures shows a very different and much weaker oil demand picture for the country that still accounts for almost a quarter of global consumption. High prices do appear to be having a negative impact on US demand, which has not grown year-on-year since May."

Energy prices
The January contract for benchmark US light, sweet crudes traded as low as $87.07/bbl in the Dec. 7 session on the New York Mercantile Exchange before closing at $88.28/bbl, down $1.95 for the day. The February contract dropped $1.79 to $88.15/bbl. On the US spot market, WTI at Cushing, Okla., was down $1.95 to $88.29/bbl. Heating oil for January delivery fell 4.03¢ to $2.50/gal on NYMEX. The January contract for reformulated blend stock for oxygenate blending (RBOB) declined 3.23¢ to $2.27/gal.

The January natural gas contract dropped 17.5¢ to $7.16/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 22¢ to $7.08/MMbtu.

In London, the January IPE contract for North Sea Brent crude lost $1.54 to $88.64/bbl, again topping the NYMEX price for WTI. The December gas oil contract dropped $3.25 to $784.25/tonne.

The average price for OPEC's basket of 12 reference crudes gained 78¢ to $85.26/bbl on Dec. 7. So far this year, OPEC's basket price has averaged $67.94/bbl, up from $61.08/bbl for all of 2006.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

MARKET WATCH: Oil prices continue falling awaiting economic statistics

12/16/2014 Oil prices on the New York market dropped in Dec. 15 trading following reports of supply disruptions in Libya and awaiting reports of economic stat...

MARKET WATCH: OPEC basket price closes below $59/bbl

12/15/2014 The average crude oil basket price for the 12 members of the Organization of Petroleum Exporting Counties closed below $59/bbl on Dec. 12 while cru...

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...

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