MARKET WATCH: Rebounding stock market lifts oil prices

Sam Fletcher
Senior Writer

HOUSTON, Nov. 14 -- The front-month crude futures contract hit another 21-month low Nov. 13 before rebounding by 4%, pulled along by one of the largest turnarounds in stock market.

"The market traded in a V-shaped pattern," said analysts in the Houston office of Raymond James & Associates Inc., with the Standard & Poor's 500 stock index and the National Association of Securities Dealers Automated Quotation system (NASDAQ) touching 5-year lows before rallying to close with gains of almost 7%. Energy stocks outperformed the general market with the S&P E&P 1500 energy sector index and the Oil Service Index up 11.3% and 11.8%, respectively.

Olivier Jakob at Petromatrix, Zug, Switzerland, noted a "very strong correlation" in trade between the Dow Jones Industrial Average and the front-month crude contract. However, he said, "We are starting to see a divergence in the dollar-to-oil trade as the dollar index is finding more difficulty in ascending as quickly as oil is descending."

The December contract for benchmark light, sweet crudes traded as low as $54.67/bbl following an Energy Information Administration report that crude inventories were unchanged at 311.9 million bbl in the week ended Nov. 7, despite a Wall Street consensus for a 1.2 million build. Gasoline increased by 2 million bbl to 198.1 million bbl, outstripping the consensus for a 200,000 bbl advance. Distillate fuel inventories rose by 600,000 bbl to 128.4 million bbl (OGJ Online, Nov. 13, 2008).

The average price for the Organization of Petroleum Exporting Countries' basket of 13 reference crudes dropped $2.21 to $47.73/bbl Nov. 13, prompting OPEC Pres. Chakib Khelil to invite non-Arab members of that group for market consultations at the Nov. 29 meeting of the Organization of Arab Petroleum Exporting Countries in Cairo, ahead of the scheduled OPEC meeting Dec. 17 in Oran, Algeria. Iran, Venezuela, and Algeria are calling for another production cut to halt the fall in oil prices.

Meanwhile, Saudi Arabia's King Abdallah bin Abd al-Aziz Al Saud has been invited to the weekend meetings of the Group of 20, an economic forum of the world's largest economies, in Washington, DC. However, Jakob said the purpose "is not to ask for Saudi Arabia to bring the price of oil to $30/bbl" but to help fund the International Monetary Fund. "It is difficult to ask for both," Jakob observed.

Energy prices
The December crude contract climbed by $2.08 to $58.24/bbl Nov. 13 on the New York Mercantile Exchange. The January contract gained $2.03 to $59.06/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up $2.08 to $58.24/bbl. Heating oil for December increased 3.96¢ to $1.88/gal on NYMEX. The December contract for reformulated blend stock for oxygenate blending (RBOB) gained 5.43¢ to $1.30/gal.

Natural gas for that same month dropped 8.7¢ to $6.32/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 32.5¢ to $6.29/MMbtu.

In London, the December IPE contract for North Sea Brent crude declined 38¢ to $51.99/bbl. The December gas oil contract lost $12.50 to $574.25/tonne.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Uganda taps Russian firm to build country’s first refinery

02/17/2015 The government of Uganda has selected a consortium led by Russia’s RT Global Resources, Moscow, as its first choice to construct the country’s firs...

Indian state, Kuwaiti firm sign deal for refinery, petchem complex

02/16/2015 The government of India’s Andhra Pradesh state has entered an agreement with Al Qebla Al Watya Inc., a subsidiary of Mohammed Abdulmohsin Al-Kharaf...

USW union workers add two BP refineries to strike list

02/16/2015 Union workers at two BP PLC-owned refineries in Indiana and Ohio have joined the United Steelworkers union's unfair labor practice strike against t...

Oil, gas, and Wack-O-Wax

02/16/2015 Oil & Gas Journal reported on the Jan. 18 explosion at Petroleo Brasileiro SA's 323,000-b/d Landulpho Alves refinery in Sao Francisco do Conde,...

Mangalore refinery reports steady operations following expansion

02/13/2015 Operations are proceeding smoothly at Mangalore Refinery & Petrochemicals Ltd.’s (MRPL) refinery in Mangalore, India, following the recent comp...

Omsk refinery hits target for Euro 5 diesel output

02/12/2015 JSC Gazprom Neft has switched to the exclusive production of Euro 5-standard diesel fuels at its 21.4 million-tonne/year Omsk refinery in Western S...

Bakken formation pressure standards to take effect Apr. 1

02/10/2015 North Dakota oil and gas regulators ordered operators to condition crude oil from the Bakken, Three Forks, and Sanish formations, effective Apr. 1,...

USW union workers add two BP refineries to strike list

02/09/2015 Union workers at two BP PLC-owned refineries in Indiana and Ohio have joined the United Steelworkers union’s (USW) unfair labor practice (ULP) stri...

Chevron details scheduled maintenance for Cape Town refinery

02/09/2015 Chevron South Africa (Pty.) Ltd., a subsidiary of Chevron Corp., has reported it will begin one of the biggest routine maintenance and safety inspe...
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