MARKET WATCH: Crude oil price rebounds, breaking losing streak

Sam Fletcher
OGJ Senior Writer

HOUSTON, July 8 -- Increased US retail sales indicating continued economic expansion pushed the near-month crude contract above $74/bbl July 7 on the New York market, breaking a 7-session losing streak.

“The broader market rallied as a report from the International Council of Shopping Centers showed that US retail sales increased 1% for the week ending July 3, while sales expanded at an average monthly rate of 4% for the 5 months ending in June, the biggest gain since 2006,” said Anuj Sharma, research analyst at Pritchard Capital Partners LLC in Houston.

However, analysts in the Houston office of Raymond James & Associates Inc. reported, “Gas prices stalled out, falling 2.2% on the day, but appear to be bouncing back modestly this morning.”

Meanwhile, the US Department of Energy said a moratorium on deepwater drilling in the Gulf of Mexico, if reinstated, would reduce US crude production by 31,000 b/d in the fourth quarter, up 5,000 b/d from last month’s estimate. It also estimated the production loss in 2011 at 82,000 b/d, up from a June prediction of 70,000 b/d. The government estimated benchmark US crude will average $79/bbl through the second half of this year, increasing to $83/bbl in 2011.

DOE expects gas prices to increase as a result of this year’s hurricane season, averaging $4.70/MMbtu for 2010.

The Obama administration’s moratorium on deepwater drilling in the gulf was knocked down by a federal judge who said it was too broad. The US Department of Justice then took it to the US Court of Appeals for the Fifth Circuit, “historically a pro-business court,” said Raymond James analysts. That court is “expected to make a quick ruling after a rare 1-hr oral argument today,” they said. “Win or lose, the Supreme Court could become involved. Regardless, the ban will be amended, which could lead to additional litigation.”

US inventories
The Energy Information Administration said July 8 commercial US crude inventories fell 5 million bbl to 358.2 million bbl in the week ended July 2, well below the Wall Street consensus for a 2 million bbl decrease. Gasoline stocks gained 1.3 million bbl to 219.4 million bbl in the same period, exceeding analysts’ expectations of a 100,000 bbl addition. Distillate fuel inventories edged up 300,000 bbl to 159.7 million bbl while the market had expected a build of 1.6 million bbl.

Imports of crude into the US dropped 68,000 b/d to 9.4 million b/d in that same week, primarily due to disruption of Mexico’s crude exports by Hurricane Alex. In the 4 weeks through July 2, US crude imports averaged 9.7 million b/d, up 449,000 b/d above the comparable period in 2009.

The input of crude into US refineries increased 135,000 b/d to 15.2 million b/d in the latest week, with units operating at 89.9% of capacity. Gasoline production decreased to 9.4 million b/d, and distillate fuel production declined to 4.4 million b/d.

EIA also reported the injection of 78 bcf of gas into US underground storage in the week ended July 2. That increased the amount of working gas in storage past 2.76 tcf. That’s 23 bcf less than in the same period a year ago but 285 bcf above the 5-year average.

Energy prices
The August contract for benchmark US sweet, light crudes gained $2.09 to $74.07/bbl July 7 on the New York Mercantile Exchange. The September contract escalated $2.13 to $74.64/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up $2.09 to $74.07/bbl. Heating oil for August delivery advanced 6.15¢ to $1.98/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month increased 5.4¢ to $2.03/gal.

The August contract for natural gas dropped 11.7¢ to $4.57/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 13¢ to $4.71/MMbtu.

In London, the August IPE contract for North Sea Brent gained $2.06 to $73.51/bbl. Gas oil for July was up $3.25 to $626.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes inched up 1¢ to $69.74/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

A message from Oil & Gas Journal

12/15/2014

An important transition occurred during production of this issue of Unconventional Oil & Gas Report.

MARKET WATCH: Crude oil prices down as US government shutdown lingers

10/16/2013 The front month crude oil contract on the New York market dropped to the lowest level on Oct. 15 since it last settled below $100/bbl on July 2.

MARKET WATCH: Crude oil traded higher amid Washington budget talks

10/15/2013 Crude oil futures prices traded higher on the New York market Oct. 14 as US lawmakers reported progress in ongoing efforts toward reaching an agree...

MARKET WATCH: Oil prices close down at end of volatile week

10/14/2013 The NYMEX November crude contract lost 99¢ on Oct. 11, settling at $102.02/bbl ending a week of volatile trading. The December contract fell 83¢ to...

MARKET WATCH: Oil prices continue falling as Syria risk apparently lessens

09/17/2013 Oil futures prices reached their lowest level in 3 weeks with the Sept. 16 closing while the US and Russia agreed to terms under which Syria is exp...

MARKET WATCH: Oil prices rebound slightly awaiting US decision on Syria

09/04/2013 Oil prices climbed on New York and London markets Sept. 3 in response to comments indicating key US lawmakers will support US President Barack Obam...

MARKET WATCH: Syria crisis puts pressure on some oil markets

08/27/2013 Crude oil prices in world markets edged upwards Aug. 26 on reports that “tolerance of the West for what’s taking place in Syria appears to be comin...

MARKET WATCH: Oil futures rise Aug. 23 on Lebanon violence

08/26/2013 Oil futures prices rose on the New York market Aug. 23, and traders attributed the increase to escalating violence in the Middle East that added to...

MARKET WATCH: Oil, natural gas close up in waffling markets

08/23/2013 The October contract for benchmark US light, sweet crudes on the New York Mercantile Exchange increased $1.18 to $105.03/bbl Aug. 22. The November ...

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