MARKET WATCH: Energy prices remain mixed in confused world markets

The price of benchmark US crudes accelerated its rise, boosted above $90/bbl Sept. 13 in the New York market by production cuts in Canadian syncrude, while in Europe North Sea Brent continued its price decline with rapidly deteriorating refining margins.

“Crude advanced 2% as traders anticipated a stockpile drawdown following Hurricane Irene and Tropical Storm Lee. Natural gas was flat on a moderating weather outlook that could reduce power plant utilization,” said analysts in the Houston office of Raymond James & Associates Inc. In early trading Sept. 14, the market appeared ready “to compound its 2-day streak in anticipation of more positive signals from Europe. Crude futures are slightly down and natural gas is flat,” they said.

In Zug, Switzerland, however, Olivier Jakob at Petromatrix said, “The European situation remains extremely confusing.” A report at the start of this week that China might buy government bonds from financially troubled Italy was later “clarified that China was looking potentially at buying Italian assets,” he said.

Reports circulated late in the Sept. 13 trading session “that Brazil, Russia, India, China and South Africa (BRICS)” were considering the possibility of buying European bonds. “Brazil and South Africa seen as the savior of Europe? If those headlines are the only thing being seen as a solution to support the market, then we have to be really worried,” said Jakob. Meanwhile, he noted, “The US asset recovery drive has been led by a policy of dollar debasing, and that becomes at risk if the euro falls down.”

James Zhang at Standard New York Securities Inc., the Standard Bank Group, reported, “Gasoline and naphtha cracks improved somewhat yesterday, while middle-distillate cracks weakened slightly. The movement in product cracks led to a slight improvement for overall refining margins, but the margins remained overall poor. The term structure for Brent at the very front-end of the curve continues to climb while the time spread from November onwards weakened substantially.” He expects the North Sea Brent structure to weaken as crude supply improves and refining margins weaken.

Jakob said, “Refining margins were strong in August, but the crude oil buying that they induced has since then propelled crude oil premiums to multiyear highs, and it did also translate during August in Brent reaching a new record high premium to West Texas Intermediate. However, the products have stopped providing a leadership to the oil complex and as a result the refining margins in the Atlantic Basin have plunged to negative levels and are at lows for the year.”

Refining margins in the Atlantic Basin “are negative for the Brent premium to WTI, hence on a fundamental basis we continue to see the Brent premium to WTI as overbought.” Jakob said, “If the Brent futures premium to WTI does not continue to correct lower and if products are not able to regain some price leadership, then a next logical step would be to see pressure developing on the crude oil physical premiums; that would then put some pressure on the Brent times-spread structure and given that the time-spread structure in WTI has flattened, it would then again cap the Brent premium to WTI on a roll-at-risk basis.”

US inventories

The Energy Information Administration said Sept. 14 US commercial crude oil inventories fell 6.7 million bbl to 346.4 million bbl in the week ended Sept. 9, well below the 3 million bbl drop anticipated in the Wall Street consensus. On the other hand, gasoline stocks climbed by 1.9 million bbl to 210.8 million bbl last week—above average for the time of year—compared with analysts’ expectations of a 500,000 bbl decline. Finished gasoline inventories increased while blending components remained unchanged. Distillate fuel inventories increased by 1.7 million bbl to 158.5 million bbl in the same period, more than double the market’s outlook for a 700,000 bbl increase.

Imports of crude into the US declined 23,000 bbl to 8.5 million bbl last week, EIA reported. In the 4 weeks through Sept. 9, US crude imports averaged 8.9 million b/d, down 494,000 b/d from the comparable period a year ago. Gasoline imports averaged 659,000 b/d last week while distillate fuel imports averaged 154,000 b/d.

The input of crude into US refineries fell 426,000 b/d to 15 million b/d last week with units operating at 87% capacity. EIA said gasoline production increased to 9.4 million b/d while distillate fuel production decreased to 4.5 million b/d.

Energy prices

The October contract for benchmark US light, sweet crudes jumped by $2.02 to $90.21/bbl Sept. 13 on the New York Mercantile Exchange. The November contract escalated $1.97 to $90.28/bbl. On the US spot market, WTI at Cushing, Okla., continued to match the front-month futures price, up $2.02 to $90.21/bbl.

Heating oil for October delivery declined 1.14¢ to $2.94/gal, however, on NYMEX. Reformulated blend stock for oxygenate blending for the same month inched up 0.42¢ but remained virtually unchanged at a rounded $2.74/gal.

The October contract for natural gas gained 9.5¢ to $3.98/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., increased 1.5¢ to $3.96/MMbtu.

In London, the October IPE contract for North Sea Brent slipped 36¢ to $111.89/bbl. The new front-month October contract for gas oil dropped $8.50 to $924.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes rose 56¢ to $108.42/bbl.

Contact Sam Fletcher at

Related Articles

Inhofe, Lankford say new BIA rules threaten Osage oil operations

07/10/2015 New US Bureau of Indian Affairs regulations that increase production expenses on tribal lands could put the Osage Nation out of business, Oklahoma’...

House panel’s crude export ban hearing weighs urgency against caution

07/10/2015 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...

Chevron Phillips Chemical makes executive appointments


Chevron Phillips Chemical Co. LLC has made several executive appointments, all effective Aug. 1.

Twelve workers killed in Nigeria pipeline explosion

07/10/2015 Eni SPA reported that an explosion occurred July 9 at the repair site for the Tebidaba-Clough Creek oil pipeline in Nigeria’s onshore Niger Delta.

Gov. Tomblin forms West Virginia oil, gas safety commission

07/10/2015 West Virginia Gov. Earl Ray Tomblin (D) established the oil and gas safety commission he announced in his 2015 State of the State address. The grou...

MARKET WATCH: NYMEX, Brent crude oil prices rebound more than $1/bbl

07/10/2015 Prices for US light, sweet crude oil and Brent crude each rebounded by more than $1/bbl on their respective markets July 9, and analysts attributed...

Transco seeks FERC approval for New York Bay Expansion project

07/09/2015 Transcontinental Gas Pipe Line Co. LLC (Transco), a wholly owned subsidiary of Williams Partners LP, has filed an application with the US Federal E...

House Oversight panel subpoenas Kerry for Keystone XL documents

07/09/2015 The US House Oversight and Government Reform Committee issued a subpoena to US Sec. of State John F. Kerry for reports, recommendations, letters, a...

MARKET WATCH: NYMEX crude oil prices drop for fifth consecutive trading session

07/09/2015 US light, sweet crude oil prices settled slightly lower on the New York market July 8 for the fifth consecutive trading session, and analysts attri...
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

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


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.


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