MARKET WATCH: Energy prices slip with economic uncertainties

Sam Fletcher
Senior Writer

HOUSTON, Mar. 3 -- Front-month crude hit a new high of $103.05/bbl in overnight electronic trading on Feb. 29 before slipping below the previous session's record high closing, pulled down by the falling stock market.

On Mar. 3, the US Department of Commerce said construction spending fell 1.7% in January—its steepest drop in 14 years. The Institute for Supply Management also reported a contraction in US manufacturing during February to the weakest level in 5 years.

"The [equity] market fell 3% on [Feb. 29] and took the energy markets down with it, despite commodity prices [declining] less than 1%," said analysts in the Houston office of Raymond James & Associates Inc. They expect to see a second-quarter build in oil inventories that may dampen short-term prices, though second-half draws should provide further strength later in the year. "Looking to natural gas, we reiterate our bearish summer call, though bullish cold weather and continued short squeezes may bolster prices in the near-term," Raymond James said.

Despite the end-of-the-week decline in energy prices, Olivier Jakob at Petromatrix, Zug, Switzerland, noted West Texas Intermediate increased a total $3.03/bbl during the week, marking the fourth consecutive week for gains of $3-4/bbl. North Sea Brent gained about the same, up $3.09/bbl for the week. The April contract for heating oil "managed to more or less follow with an increase of $2.71/bbl, but RBOB gasoline was stalling and made a loss of 27¢/bbl," he said. Natural gas for April increased 1.9%, "and WTI is up $40.20/bbl from a year ago," Jakob said.

Meanwhile, the Ecuador government on Feb. 29 declared a force majeure on its oil exports after a mudslide ruptured some 80 m of the Trans-Ecuadorian Oil Pipeline System (SOTE) last week (OGJ Online, Feb. 29, 2008). Government officials estimated it would take 3-6 days to repair that pipeline that extends 312 miles from the Amazon region to the port of Balao on the Pacific Coast. That pipeline has a capacity of 390,000 b/d and carries an average of 360,000 b/d, primarily for the state oil company, Petroecuador, which exports about 167,000 b/d. Some 4,000 bbl of crude were spilled by the mishap.

In other news, Noble Drilling Corp. and Transocean Inc. are challenging the Nigerian government's plan to reclassify drilling rigs as ships, which would impose a 2% tax on revenues from those units. That would be "clearly bearish for both companies, but instincts point to resolution as such a move would push available capacity out of the region at a time when Nigerian oil output faces internal problems," Raymond James analysts said.

Energy prices
The April contract dipped by 75¢ to $101.84/bbl Feb. 29 on the New York Mercantile Exchange. The May contract lost 83¢ to $101.42/bbl. On the US spot market, WTI at Cushing, Okla., was down 75¢ to $101.85/bl. Heating oil for March slipped by 0.59¢ to $2.84/gal on NYMEX. The March contract for reformulated blend stock for oxygenate blending (RBOB) gained 1.66¢ to $2.51/gal, however.

The April natural gas contract lost 7.7¢ to $9.37/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., increased 1¢ to $9.12/MMbtu.

In London, the April IPE contract for North Sea Brent crude dropped 80¢ to $100.10/bbl. Gas oil for March gained $7.50 to $915/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes escalated by $1.51 to $96.50/bbl. The average price for OPEC's basket of crudes so far this year is $89.63/bbl.

Contact Sam Fletcher at

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

BHI: US oil rig count rises for first time in 30 weeks

07/02/2015 A sudden 12-unit jump in oil-directed rigs during the abbreviated week ended July 2 represented their first rise since Dec. 5, 2014, and helped lif...

Quicksilver Canada gets LNG export approval

07/02/2015 Quicksilver Resources Canada Inc. has received approval from the National Energy Board of Canada to export 20 million tonnes/year of LNG from a pos...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Origin lets contract for Otway basin fields

07/02/2015 Origin Energy Ltd., Sydney, has let a $1.3 million (Aus.) contract to Wood Group Kenny for provision of a detailed engineering design for the onsho...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

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
Available Webcasts

Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

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.


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


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