MARKET WATCH: Low interest rates buoy oil prices

Crude oil prices continued rising with the front-month contract up 1% in the New York market after Federal Reserve Chairman Ben Bernanke indicated US interest rates will remain low to support a still-weak labor market.

Standard & Poor’s 500 Index climbed 1.4%, erasing all of last week's losses, and the euro strengthened against the dollar. Continued concern over Iran’s oil exports contributed to higher oil prices.

However, analysts in the Houston office of Raymond James & Associates Inc. reported, “Natural gas futures fell 2% as high supplies and warm weather continue to weigh on prices.”

Olivier Jakob at Petromatrix in Zug, Switzerland, said, “Flat [crude] price remains very difficult to trade. On the support side we have the war on Iran and the interventions of the US Federal Reserve; on the resistance we have demand destruction. Trading volume in crude oil futures has been trending lower in recent days, and yesterday it totally collapsed. Volume was very low in Brent, and in West Texas Intermediate it fell to the lowest level of the year. Given the very low volume currently trading crude oil futures, the very long exposure of large speculators, and the usual need to mark-up the books for the end of the quarter, we have to consider the risk of an end-of-the-quarter push higher if the American Petroleum Institute and Department of Energy [weekly inventory reports] do not come with a sentiment killer.”

Meanwhile, in the UK, a union of fuel delivery drivers voted Mar. 26 to strike in a dispute with delivery companies over safety conditions and pay. “The drivers deliver refined products to fuel stations that are branded (though not necessarily owned) by BP PLC, ExxonMobil Corp., Royal Dutch Shell PLC, and two supermarket chains. In aggregate, roughly 90% of Britain's fuel stations could be affected,” said Raymond James analysts.

Because the drivers gave 7 days’ notice, the strike won’t start until next week. “Until then we should expect a pick-up in demand as every car tank and jerry can should be filled up before strike,” said Jakob. “The UK supply system is already under some pressure due to the question mark over Coryton, and a strike will surely not help. Not the best for its image if petrol stations in the UK run out of fuel in front of the Olympics.”

The 220,000-b/d Coryton refinery near London is owned by the bankrupt Petroplus Holdings AG who is talking to potential buyers.

In other news, Jakob said, “The Forties crude oil stream should be affected by the problems that Total SA currently has with the gas leak on its Elgin platform. Elgin is producing about 30,000 b/d and Franklin is also at 30,000 b/d. Hence if output from Franklin is also affected, it will result in a loss of about 60,000 b/d to the Forties stream. Shell is said to be evacuating its Shearwater platform, but that one with an output of 2,000 b/d is fully negligible.”

He said, “Reports of more intense fighting in Sudan and of bombings of oil fields will push further away the expectations of seeing oil flowing back from that country.”

Energy prices

The May contract for benchmark US sweet, light crudes increased 16¢ to $107.03/bbl Mar. 26 on the New York Mercantile Exchange. The June contract rose 20¢ to $107.55/bbl. On the US spot market, WTI at Cushing, Okla., was up 16¢ to $107.03/bbl.

Heating oil for April delivery increased 1.87¢ to $3.23/gal on NYMEX. Reformulated stock for oxygenate blending for the same month gained 3.14¢ to $3.42/gal.

The April natural gas contract dropped 4.9¢ to $2.23/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., escalated 8.7¢ to $2.17/MMbtu.

In London, the May IPE contract for North Sea Brent advanced 52¢ to $125.65/bbl. Gas oil for April was up $1 to $1,030/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased 72¢ to $123.49/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...
White Papers

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

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
Available Webcasts


Operating a Sustainable Oil & Gas Supply Chain in North America

When Wed, Oct 7, 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.

register:WEBCAST


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


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