MARKET WATCH: Energy prices escalate with hopes to ease European crisis

Energy prices escalated Sept. 27 despite no apparent change in market fundamentals, with crude making an amazing jump of 5.3% to recoup most of last week’s losses in the New York market. Natural gas was up 1.2% as it too followed a rally in the broader market on signs of progress in the Euro-zone sovereign debt crisis.

“One would think that Europe's debt crisis, domestic austerity, and global economic malaise are now nonstarters. But what has really changed since last week? Aside from ‘le Tarp’ [the Euro-zone bailout plan] in Europe, the ‘Buffett rule’ [the administration’s proposal to raise taxes on the wealthy] in the States, and an artificial range increase for [China’s] yuan that smacks of currency manipulation, not much; and with short positions at a post-March 2009 high, investors seem to be taking advantage of the calm before the storm,” said analysts in the Houston office of Raymond James & Associates Inc.

They reported the Standard & Poor’s 500 index was higher during early trading Sept. 28 “in anticipation of another round of German-led bailouts.” Crude futures were down 1%, and gas futures were trading flat.

James Zhang at Standard New York Securities Inc., the Standard Bank Group., said, “Gasoline cracks strengthened yesterday from a recent decline, despite a large inventory build in US gasoline reported by the American Petroleum Institute. The term structures for both Brent and West Texas Intermediate remained largely unchanged.”

Zhang reported, “The European Union commission appeared to push on with the idea to bolster the European Financial Stability Fund (EFSF), and the Greek parliament passed a new tax on properties.” Nonetheless, he said, “We view the very strong rally across both the equity and commodity markets as more of a relief rally that is unlikely to be sustained. Although a bigger EFSF fund might buy some more time for Euro-zone policymakers, it is not sufficient to resolve the current crisis. Germany is to vote [Sept. 29] whether to agree to an expansion of the EFSF, which will be a key event for the market.”

Zhang said, “We expect the oil price to remain under pressure from both the ongoing Euro-zone debt crisis and the deteriorating global economy. Volatility is expected to remain elevated. Refining margins and the Brent structure are likely to weaken, while we see the WTI structure firming on further inventory draws at Cushing, Okla.”

In other news, the Buzzard field in the North Sea was reported to have ramped up production to 180,000 b/d, still below its previous production rate of 200,000 b/d.

US inventories

The Energy Information Administration reported Sept. 28 commercial US crude inventories increased 1.9 million bbl to 341 million bbl in the week ended Sept. 23, just above average for this time of year but short of Wall Street’s consensus for a 2.1 million bbl gain. Gasoline stocks were up 800,000 bbl to 214.9 million bbl, also above average but short of market expectations of a 1 million bbl increase. Finished gasoline inventories remained unchanged while blending components inventories increased last week. Distillate fuel inventories rose 100,000 bbl to 157.7 million bbl, contrary to analysts’ consensus for a 400,000 bbl decrease.

Imports of crude into the US increased by 1.4 million b/d to 9.7 million b/d last week. In the 4 weeks through Sept. 23 crude imports averaged 8.8 million b/d, down 277,000 b/d from the comparable period a year ago. Gasoline imports last week averaged 541,000 b/d while distillate fuel imports averaged 150,000 b/d.

The input of crude into US refineries was down 130,000 b/d to 15.2 million b/d last week with units operating at 87.8% of capacity. Gasoline production increased to 9.3 million b/d while distillate fuel production increased to 4.6 million b/d.

Energy prices

The November contract for benchmark US light, sweet crudes jumped $4.21 to $84.45/bbl Sept. 27 on the New York Mercantile Exchange. The December contract escalated $4.20 to $84.68/bbl. On the US spot market, WTI at Cushing remained in step with the front-month crude futures price, up $4.21 to $84.45/bbl.

Heating oil for October delivery climbed 8.51¢ to $2.88/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month continued its advance with a remarkable 1-day gain of 12.61¢/gal.

The October contract for natural gas continued to rally, up 4.5¢ to $3.83/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., rose 11¢ to $3.92/MMbtu.

In London, the November IPE contract for North Sea Brent gained $3.20 to $107.14/bbl. Gas oil for October increased $16.25 to $906.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes regained $2.72 to $104.53/bbl.

Contact Sam Fletcher at

Related Articles

BLM extends comment period for Colorado oil, gas project’s EA

07/21/2015 The US Bureau of Land Management has extended the comment period for a preliminary environmental assessment (EA) of a proposed oil and gas project ...

Study looks at gas transmission, storage sites’ methane releases

07/21/2015 A comprehensive study of US natural gas transmission and storage operations found total methane emissions from 2,292 on-site measurements, addition...

MARKET WATCH: NYMEX crude oil price for August briefly dips below $50/bbl

07/21/2015 Light, sweet crude oil prices briefly dropped below $50/bbl on the New York market on July 20 for the first time since April but regained some supp...

Canadian provincial premiers propose national energy strategy

07/20/2015 Provincial premiers in Canada have proposed a national energy strategy with actions targeting “sustainability and conservation,” “technology and in...

EPA needs to improve oversight of fracing with diesel, OIG report says

07/20/2015 The US Environmental Protection Agency needs to improve its oversight of hydraulic fracturing using diesel fuels and address any compliance issues,...

URTeC: Shell’s Hackbarth says unconventional innovation begins with data

07/20/2015 Operators should resist the impulse to pull back on investments in technology despite a down oil market, said Claudia J. Hackbarth, manager, unconv...

PV seen gaining on gas-fueled electricity

07/20/2015 Utility-scale photovoltaic (PV) conversion of solar energy into electricity soon will be competitive with generation fueled by natural gas, predict...

MARKET WATCH: NYMEX crude oil prices settle nearly flat on lower rig count

07/20/2015 Light, sweet crude oil prices settled nearly flat on the New York market on July 17 after a volatile trading session that started with prices going...

House panel's oil export ban hearing weighs urgency against caution

07/17/2015 A US House Energy and Commerce subcommittee hearing on legislation to repeal the ban on exporting US-produced crude oil quickly broke along party l...
White Papers

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

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
Available Webcasts

Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.


Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors


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