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

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

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