MARKET WATCH: Crude oil price hits 5-week high

Sam Fletcher
OGJ Senior Writer

HOUSTON, Feb. 19 -- Crude oil prices continued to climb, hitting a 5-week high Feb. 18 in the New York market despite a government report showing a smaller-than-expected build in total petroleum inventories.

Energy commodities gave back some of their earlier gains from that session after the Federal Reserve raised by 25 points to 0.75% the discount rate it charges banks for emergency loans in a move to tighten credit and strengthen the dollar.

Olivier Jakob at Petromatrix, Zug, Switzerland, said, “West Texas Intermediate was at a technical pivot yesterday, and it managed to hold firm on an intraday basis against the dollar.” Gasoline led the rise in oil prices “with the support probably coming from the low gasoline production and import numbers being reported, which will challenge the idea of further builds next week,” he said.

However, the dollar was up and oil and gas prices were down in early trading Feb. 19.

The Energy Information Administration said commercial US crude inventories jumped by 3.1 million bbl to 334.5 million bbl in the week ended Feb. 12, well above Wall Street’s consensus of a 1.7 million bbl gain. Gasoline stocks advanced 1.7 million bbl to 232.1 million bbl, also exceeding a consensus for a 1.5 million bbl increase. Distillate fuel inventories fell 2.9 million bbl to 153.3 million bbl, exceeding analysts’ expectations of a 1.5 million bbl decline but still above average for this time of year (OGJ Online, Feb. 18, 2010).

The American Petroleum Institute earlier reported a 63,000 bbl decline in US crude inventories, a 1.4 million bbl increase in gasoline, and an increase of 1.3 million bbl in distillates.

EIA also reported the withdrawal of 190 bcf of natural gas from US underground storage in the week ended Feb. 12. That left 2.03 tcf of working gas in storage, up 26 bcf from year-ago levels and 53 bcf above the 5-year average.

In other news, Jakob said a leaked “confidential” report from the International Atomic Energy Agency indicates Iran has accomplished nuclear enrichment of 19.8% in its drive to develop atomic power. That comes a week after the White House spokesman said Iranian claims of 20% nuclear enrichment were based on “politics, not on physics.”

The IAEA report “will reactivate the political drive for new sanctions and could attract some fresh buying from asset managers and consumers hedging against the ‘phantom of Hormuz,’” Jakob said, adding, “The fear of Iran has always been instrumental in the price run-ups of 2007 and 2008, fueling the ‘what-if’ scenarios that are necessary for bull runs, and this year might not be different. The narrower contango on crude oil also makes it less expensive to hold crude oil for a premium risk, but recent history has also shown that it is better to cash-in on the ‘Iranium’ hype than to buy and hold forever on it.”

Energy prices
The March contract for benchmark US light, sweet crudes gained $1.73 to $79.06/bbl Feb. 18 on the New York Mercantile Exchange. The April contract increased $1.69 to $79.42/bbl. On the US spot market, WTI at Cushing, Okla., was up $1.73 to $79.06/bbl. Heating oil for March delivery rose 4.49¢ to $2.05/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month advanced 6.21¢ to $2.07/gal.

The March natural gas contract dropped 21.4¢ to $5.17/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 8¢ to $5.39/MMbtu.

In London, the April IPE contract for North Sea Brent crude gained $1.51 to $77.78/bbl. Gas oil for March was up $13.50 to $624.50/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes increased 16¢ to $74.49/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

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...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...

USGS: Water usage for fracturing varies widely across shale plays

07/01/2015 The volume of water required to hydraulically fracture wells varies widely across the country, according to the first national analysis and map of ...

Case for Keystone XL has grown stronger, TransCanada tells Kerry

06/30/2015 Canada is taking strong steps toward combating climate change, and the proposed Keystone XL pipeline crude oil pipeline remains in the US national ...

Forum extends study of subsea integrity

06/30/2015

Work by an industry forum called SURF IM Network, which studies oil and gas subsea integrity management, has been extended by 3 years.

Survey begins of collaboration on the UKCS

06/30/2015

Deloitte has begun a survey about collaboration in the oil and gas producing industry of the UK Continental Shelf.

Lytle named to Canada’s National Energy Board

06/30/2015

Murray Lytle has been appointed as a full-time member of Canada’s National Energy Board for a term of 7 years, effective July 6.

White Papers

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

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
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

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


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