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

Corrected maps narrow compressor performance prediction range

01/05/2015 Tests on two in–service compressors show corrected performance maps can predict a compressor's performance within 5% relative error under most situ...

HollyFrontier wraps extended Kansas refinery maintenance

01/05/2015 HollyFrontier Corp., Dallas, has completed a 3-month planned maintenance turnaround at its 135,000-b/d El Dorado, Kan., refinery following extended...

Yearly refinery construction indexes listed for 80+ years

01/05/2015

Here are yearly values for the Nelson-Farrar refinery inflation cost index since 1926.

Essar commissions unit at Vadinar refinery

01/02/2015 Essar Oil Ltd., a subsidiary of Essar Energy PLC, has commissioned a second hydrogen manufacturing unit (MHU) at its 405,000-b/d Vadinar refinery i...

Eni, Saras strengthen integration of Sardinian processing plants

01/02/2015 Versalis SPA, the wholly owned chemicals subsidiary of Eni SPA, has entered an agreement with Saras SPA subsidiary Sarlux SRL to formalize the sale...

CNPC lets contract for grassroots refinery

12/30/2014 Yunnan Petrochemical Co. Ltd., jointly owned in part by PetroChina Co. Ltd.—the publicly listed arm of state-owned China National Petroleum Corp. (...

SOCAR consolidates Azerbaijani refining operations

12/29/2014 State Oil Co. of Azerbaijan Republic (SOCAR) plans to shutter and subsequently merge processing activities at its Azerneftyag refinery with those o...

Suncor wraps maintenance at Montreal refinery

12/24/2014

Suncor Energy Inc. has concluded 3 months of planned maintenance at its 137,000-b/d Montreal, Que., refinery.

Vietnam, Japan sign MOU for grassroots Vietnamese refinery

12/23/2014 State-run Vietnam National Petroleum Corp. (Petrolimex) and JX Nippon Oil & Energy Corp., a subsidiary of JX Holdings Inc., have signed a memor...

White Papers

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

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

Available Webcasts



The Future of US Refining

When 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


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

When Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST



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


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