MARKET WATCH: Natual gas price rebounds 6%; oil continues to rally

The front-month natural gas contract rebound 6% Feb. 16 on a bullish inventory report, and crude climbed above $102/bbl in New York as reduced claims for unemployment benefits and new hope for the Greek economy moved the market.

“The US weekly employment report and January’s housing starts data continue to point to a stronger US economic recovery, which kept the market in a bullish mood,” said James Zhang at Standard New York Securities Inc., the Standard Bank Group. “In addition, the restructuring of Greek debt appeared to have made some progress after recent uncertainties. Consequently, the euro recovered from the recent sell-off, which in turn pushed the oil price higher.”

In Houston, analysts at Raymond James & Associates Inc. said, “Brent crude tacked on a 1% gain to close at an 8-month high in light of supply concerns from the Middle East and the North Sea.”

Zhang said, “The front-end of the Brent structure has gone exponential, with the spread between the first 2 months’ futures contracts exceeding $1/bbl, the widest level for more than 2 months. Meanwhile, the contango at the front-end of the West Texas Intermediate curve flattened slightly due to the supply disruption of Canadian crude.”

The Energy Information Administration reported the withdrawal of 127 bcf of natural gas from US underground storage in the week ended Feb. 10. That reduced working gas in storage to 2.76 tcf, up 817 bcf from the comparable period a year ago and 765 bcf above the 5-year average (OGJ Online, Feb. 16, 2012).

Raymond James analysts said, “The storage surplus simply keeps increasing as total gas in storage is 38% above the 5-year average and quickly approaching a 1 tcf surplus. Excluding weather-related demand, the market was 1.7 bcf looser compared with last year as production continues to build on the oversupply. The forward market is trading at an increasingly steeper contango with storage carry spreads at the highest levels in 2 years, thereby easing the pain felt by customers that elect to carry excess inventories. The most pressing issue is the prospect of mandatory withdrawals for next month, as ratchets and cycling requirements start to kick-in; however, keep in mind that ratchets are negotiable and expect interruptible volumes to be the first to go as we approach the end of heating season.”

Energy prices

The March contract for benchmark US light, sweet crudes increased 51¢ to $102.31/bbl Feb. 16 on the New York Mercantile Exchange. The April contract advanced 50¢ to $102.64/bbl. On the US spot market, WTI at Cushing was up 51¢ to $102.31/bbl.

Heating oil for March delivery increased 1.81¢ to $3.21/gal on NYMEX. Reformulated stock for oxygenate blending for the same month rose 4.04¢ to $3.05/gal.

The March natural gas contract jumped 14.2¢ to $2.57/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., declined 3¢ to $2.51/MMbtu.

In London, the April IPE contract for North Sea Brent was up $1.18 to $12011/bbl. Gas oil for March dropped $1.75 to $1,004/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased 18¢ to $118.13/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

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...

Ending crude export ban would help rural US areas, House panel told

07/09/2015 Rural US communities generally have benefited from the nation’s crude oil production renaissance, and potentially could be helped more if restricti...

MOL completes Ithaca Norge acquisition

07/09/2015 MOL Group, Budapest, has completed its acquisition of Ithaca Petroleum Norge from Ithaca Energy Inc. for $60 million plus possible bonuses of up to...

Courts less deferential to regulatory agencies, GMU forum told

07/08/2015 US Supreme Court decisions in the recently completed term suggest that judicial deference to federal regulatory agencies is starting to recede, spe...

AER orders Apache Canada to address integrity of pipeline system

07/08/2015 Alberta Energy Regulator has directed Apache Canada Ltd. to address the integrity of its pipeline management system because of “failure to follow p...

API releases pipeline safety recommended practice

07/08/2015 The American Petroleum Institute released a pipeline safety recommended practice that it developed with engagement from the US Pipeline and Hazardo...

MARKET WATCH: Brent oil prices climb; NYMEX oil price holds below $53/bbl

07/08/2015 US light, sweet crude oil prices settled slightly lower on the New York market July 7 to remain under $53/bbl as Brent crude oil prices gained mode...

EIA: US oil output fell 50,000 b/d in May

07/07/2015 Total US crude oil production dropped 50,000 b/d in May compared with April and is expected to continue falling through early 2016 before growth re...

BLM approves ROW for Elko gas pipeline expansion project

07/07/2015 The US Bureau of Land Management’s Tuscarora, Nev., field office signed a decision record approving a right-of-way for Paiute Pipeline Co.’s (PPC) ...
White Papers

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

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
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When 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.

register:WEBCAST



On Demand

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

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

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