MARKET WATCH: Crude oil, gas prices rise in mixed market

The front-month crude oil contract price rose 0.9% Mar. 19 in the New York market amid concerns over pending disruption of Iranian exports. The natural gas futures price, meanwhile, increased 1.1%.

“The oil market was mixed with April West Texas Intermediate propped up ahead of its expiry today while Brent softened,” said James Zhang at Standard New York Securities Inc., the Standard Bank Group. “There were mixed fortunes in the oil product market as gasoline outperformed the oil complex while middle-distillates lagged.” He said, “The strength in the US gasoline market has been apparent as the market is focusing on a much-reduced refining capacity along the east coast of the US.”

Olivier Jakob at Petromatrix in Zug, Switzerland, said, “For now, the pump price of gasoline might be increasing, but the margins have claimed another victim and this time it is Valero Energy Corp. that announced it is once again shutting its [235,000 b/d] Aruba refinery (OGJ Online, Mar. 19, 2012).” However, he said, “The US Gulf Coast will gain in the second quarter some 325,000 b/d of new capacity at the Motiva Enterprises LLC refinery in Port Arthur, Tex., which will offset the loss of Aruba as both refineries should run on similar types of crude oil. The Valero Aruba refinery will probably be run as a storage facility (12 million bbl), but for that one needs to have some storage economics.” Meanwhile, he said, Hess Corp. announced it is trying to sell its storage capacity in St. Lucia.

In other news, China raised its domestic retail prices for gasoline and diesel more than 6%. “More importantly,” Zhang reported, “Saudi vowed to bring the price down to ‘fair levels.’”

That statement came from Saudi King Abdullah bin Abdul-Aziz Al Saud in a Mar. 19 cabinet meeting. “If the King says so, we have to take it with greater respect than if the oil minister says so,” Jakob said. “In that view, we need to note that Saudi Arabia is making a visible sign for everyone when it orders a record number of Saudi-owned Vela International Marine Ltd. [very large crude carriers] to sail to the US Gulf. At the current price and export volumes, Saudi Arabia will have met its annual budget already by the end of July, which also means that it can have oil prices return to $80/bbl and still end the year with a comfortable budget surplus.”

Moreover, he said, “The sanctions on Iran now offers some guarantees to Saudi Arabia that it does not have to fear a loss of volume, and at current volume even with a flat price drop to $55/bbl, Saudi Arabia would meet the budget (the Saudi budget was not done on the basis of 7.5 million b/d of exports and crude at $125/bbl). Iran of course would then be hit with low volume and low prices and would start to be under significant pressure, which could also then translate in less Iranian support to Syria, keeping in mind that the removal of the current regime in Syria is a key short-term political objective of the kingdom.”

The king’s statement and the Vela action could signal a change in Saudi policy, said Jakob. He pointed out, “The future for Saudi Arabia is in China more than in the US.”

Energy prices

The April contract for benchmark US sweet, light crudes climbed $1.03 to $108.09/bbl Mar. 19 on the New York Mercantile Exchange. The May contract gained 98¢ to $108.56/bbl. On the US spot market, WTI at Cushing, Okla., was up $1.03 to $108.09/bbl.

Heating oil for April delivery declined 2.06¢ to $3.26/gal on NYMEX. Reformulated stock for oxygenate blending for the same month increased 1.09¢ to $3.37/gal.

The April natural gas contract continued its rebound, up 2.5¢ to $2.35/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., regained 6.5¢ to $2.13/MMbtu.

In London, the May IPE contract for North Sea Brent dipped 10¢ to $125.71/bbl. Gas oil for April escalated by $7.75 to $1,043.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was up $1.16 to $124.08/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

WAFWA: Aerial survey finds lesser prairie chicken population grew

07/06/2015 A recent range-wide aerial survey found the lesser prairie chicken population rose 25% from 2014 to 2015, the Western Association of Fish & Wil...

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...

Cenovus sells royalty business for $3.3 billion

07/06/2015 Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gros...

CERI: Energy, operational efficiencies possible in Canadian oil, gas

07/06/2015 Measures can be taken by operators in the expanding resource-intensive Canadian oil and gas sector to improve both energy efficiency and operationa...

AGL Energy to scale back upstream gas operations

07/06/2015

Gas retailer AGL Energy Ltd., Sydney, says it will exit the oil business and massively scaling back its upstream gas operations.

Macondo settlement seen ‘positive’ for BP

07/06/2015 BP Exploration & Production Inc.’s recent agreement to settle federal and state claims related to the 2010 Macondo blowout and spill improves t...

Emerging producers offered guidelines for governance

07/06/2015 Like most worthy endeavors, governing oil and gas activity at the national level is easier said than done-especially where oil and gas never before...

Linn Energy, Quantum complete AcqCo deal

07/06/2015 Linn Energy LLC, affiliate LinnCo LLC, and Quantum Energy Partners have signed definitive agreements to fund the acquisition and development of oil...

MARKET WATCH: NYMEX oil prices fall on rise in US rig count

07/06/2015 US light, sweet crude oil prices edged down going into the July 4 holiday weekend on the New York market after Baker Hughes Inc. reported July 2 th...
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