MARKET WATCH: Crude oil shrugs off bearish inventory report

By OGJ editors

Crude oil posted a gain of 1.1% Aug. 17, “shrugging off a bearish…inventory report” from the US Department of Energy, according to analysts in the Houston office of Raymond James & Associates Inc. “Moreover,” they said, “natural gas was able to break its four-session losing streak, finishing the day with a small gain.”

James Zhang at Standard New York Securities Inc., the Standard Bank Group, noted, “Oil fluctuated in a small trading band…. Oil products lagged crude in posting a small recovery despite the large gasoline inventory draw in the US, resulting in weaker product cracks and refining margins.”

Zhang added, “The [West Texas Intermediate] structure strengthened further on another week of inventory draws at Cushing.”

Looking to global markets, Zhang observed, “There was further disappointing economic data from the UK…, showing rising unemployment and weak retail sales. At its last meeting, MPC at Bank of England voted unanimously to keep the rate unchanged, at 0.5%. This echoes recent moves by most other central banks in the developed world to increase the provision of liquidity, with the [US Federal Reserve] promising 2 years of near-zero policy rates. These monetary policy stances have further squeezed the already low returns from cash and/or bonds in many developed nations.”

Zhang concluded, “We are not very confident about the recent recovery in risk-taking, as bond yields continue to move lower. Leading economic indicators suggest the global economy could disappoint expectations. Abundant liquidity and the search for return by investors seem to be holding up the values of risky assets.

“That said, the oil market is currently much more vulnerable to supply shocks than it has been over the last 2 years, due to much-reduced inventories. We do not see an imminent substantial fall in oil prices on relatively tight fundamentals reflected by a backwardated Brent market, but high volatility in the oil market is set to continue.”

Energy prices

The September contract for benchmark US light, sweet crudes gained 93¢ to $87.58/bbl Aug. 17 on the New York Mercantile Exchange. The October contract also gained, up 88¢ to $87.73/bbl. On the US spot market, WTI at Cushing, Okla., was up 93¢ to $87.58/bbl.

Heating oil for September delivery rose 2.9¢ to $2.96/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month increased 1.65¢ to $2.87/gal.

The September contract for natural gas was up but only by a fraction of a cent, closing at $3.93/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., decreased 2¢ to $3.975/MMbtu.

In London, the October IPE contract for North Sea Brent rose $1.47 to $110.60/bbl. Gas oil for September gained $9 to $936.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased $1.46 to $106.88/bbl on Aug. 17.

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

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


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When 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



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


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