MARKET WATCH: Crude oil, natural gas prices slip lower

Sam Fletcher
OGJ Senior Writer

HOUSTON, Aug. 17 -- Energy prices slipped lower Aug. 16 with the front-month crude price down for the fifth consecutive session in the New York market, and the natural gas contract declining 2.4%.

“Oil prices continue to shadow the broader market and ended the day relatively flat while gas prices took another healthy step downward toward the $4/Mcf mark after forecasts for a cooler summer kept fingers on the sell button,” said analysts in the Houston office of Raymond James & Associates Inc.

“Oil markets were indeed in a standstill,” said Olivier Jakob at Petromatrix, Zug, Switzerland. “West Texas Intermediate remains oversold to the exogenous correlations by about $1.60/bbl; hence, if the Standard & Poor’s 500 index is able to rebound it should bring some support to WTI. The problem, however, is that the S&P is still in a pattern of lower highs and lower lows, and technical traders have been busy for the past few days discussing the merits of the ‘Hindenburg Omen,’ a controversial [and complicated] technical indicator that is believed to precede a stock market crash and that apparently started to appear [on Aug. 12].” Although the omen, named for the ill-fated German dirigible that crashed and burned in 1937, “is not a part of our toolkit,” Jakob said, “it is adding to the negative sentiment provided by the worse than expected macroeconomic data.”

Jakob said, “The gasoline crack continues to slide as the summer-to-winter backwardation continues to erode. With a 3-2-1 refinery margin of $5.20/bbl for the October contracts, we should expect to see lower refinery runs starting to be planned in the US and that translates into lower crude oil demand.” Meanwhile, he noted the WTI premium to North Sea Brent crude is disappearing, with October WTI is trading at par to Brent.

In other news, Iran is expected to start fueling its Bushehr nuclear plant early next week “or possibly already this weekend,” Jakob said. “The US has not been very voiceful against the latest start-up date but ex-US Ambassador John Bolton has been making the sound bites that this then leaves a few days for Israel if it wants to bomb the plant before it becomes operational and more difficult to attack.”

Iran’s defense minister has warned Israel’s existence “will be in danger” if it attacks the Iranian nuclear plant.

Jakob noted, “Russia announced last week that it had installed batteries of its most sophisticated anti-aircraft missiles in Abkhazia. This is surely not to protect itself from the few helicopters of Georgia. Georgia is, however, a potential northern route to Iran.”

Based on possible escalation of Middle East hostilities, Jakob said, “We would carry an additional risk premium time-specific to the end of this week, and if we continue not to like either the state of the economy or the state of the oil fundamentals, we would have some reduced short exposure until next week and the confirmation that the plant has started to be fueled.”

Energy prices
The September contract for benchmark US sweet, light crudes declined 15¢ to $75.24/bbl Aug. 16 on the New York Mercantile Exchange. The October contract lost 17¢ to $75.60/bbl. On the US spot market, WTI at Cushing, Okla., was down 15¢ to $75.24/bbl. Heating oil for September delivery dipped by 0.68¢ to $1.99/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month decreased 1.53¢ to $1.92/gal.

The September natural gas contract dropped 10¢ to $4.23/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., was down 1¢ to $4.35/MMbtu.

In London, the September IPE contract for North Sea Brent crude lost 26¢ to $74.85/bbl. Gas oil for September fell $3.75 to $633/tonne.

The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes declined 37¢ to $72.27/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Market watchers' adjustments offer hints of recovery

01/26/2015 Because markets look ahead, changes in standard forecasts offer potentially important signals during storms such as the one now pummeling the oil a...

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...
White Papers

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...

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
Available Webcasts

On Demand

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


The Future of US Refining

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

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


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