MARKET WATCH: Stronger consumer data lift energy prices

Energy prices generally posted small gains in reaction to strong consumer data Mar. 13, recovering some of the loss from the previous session. The front-month natural gas contract was up 1% in the New York market.

“Oil was boosted by the slightly more positive outlook on the US economy from the US Federal Reserve,” said James Zhang at Standard New York Securities Inc., the Standard Bank Group. “The market was also lifted by the buoyant equity market in the US and Europe, although the bullishness in oil was partially offset by a stronger US dollar.”

Petroleum products slightly outperformed crude as the American Petroleum Institute reported sizeable draws on product inventories and a build in crude stocks. “As we expected, time spreads at the front-end of Brent curve continued to weaken due to poor refining margins in Europe and the upcoming spring maintenance season,” Zhang said.

In its latest monthly oil market report, Paris-based International Energy Agency kept its demand projection unchanged for 2012 at 800,000 b/d above the 2011 level. “However, the focus remains on the supply side of the market, as the agency thinks that Iranian exports could fall by 1 million b/d from July, and spare capacity from Saudi Arabia dropped to 1.9 million b/d in February,” said Zhang. “Non-OPEC production during the first quarter also was disappointing. As tight supply drove crude prices up, product prices have been lagging, which saw on average margins for European refineries halved in February from January. This morning it was reported that Total SA has partially shut down its refinery at Gonfreville in Normandy, France, due to poor refining margins.”

The Euro remains under pressure. “The strength in the Dollar Index and Brent at $126/bbl means that in Europe new all-time record high prices at the pump will be printed,” said Olivier Jakob at Petromatrix in Zug, Switzerland. “The same goes for China, which according to its price mechanism formula should soon go through another price increase at the pump, also to a new all-time record high. To reassure those customers, the Saudi oil minister made statements again today that Saudi Arabia stands ready to supply more oil to the market but not now because supply is ample and because the current prices are the result of excessive speculation. Exactly the same thing was said by Saudi Arabia at the same time of the year in 2008. When Saudi Arabia decided to act in 2008, it was already too late for the world economy.”

US inventories

The Energy Information Administration reported Mar. 14 commercial US inventories of crude increased 1.8 million bbl to 347.5 million bbl in the week ended Mar. 9. Gasoline stocks dropped 1.4 million bbl to 228.1 million bbl. Finished gasoline inventories decreased while blending components remained unchanged. Distillate fuel inventories fell 4.7 million bbl to 134.8 million bbl.

Imports of crude into the US inched up 4,000 b/d to 8.7 million b/d last week. In the 4 weeks through Mar. 9, crude imports into the US averaged 8.9 million b/d, up 653,000 b/d compared with the same period a year ago. Gasoline imports last week averaged 532,000 b/d. Distillate fuel imports averaged 141,000 b/d.

The input of crude into US refineries declined by 126,000 b/d to 14.5 million b/d last week with units operating at 82.7% of capacity. Gasoline production increased to 8.8 million b/d, but distillate fuel production decreased to 4.1 million b/d.

Energy prices

The April contract for benchmark US light, sweet crudes increased 37¢ to $106.71/bbl Mar. 13 on the New York Mercantile Exchange. The May contract gained 40¢ to $107.24/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 37¢ to $106.71/bbl.

Heating oil for April delivery increased 2.83¢ to $3.27/gal on NYMEX. Reformulated stock for oxygenate blending for the same month advanced 3.16¢ to $3.35/gal.

The April natural gas contract was up 3¢ to $2.30/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., lost 1.5¢ to $2.15/MMbtu.

In London, the April IPE contract for North Sea Brent climbed 88¢ to $126.22/bbl. The new front-month April gas oil contract escalated by $8.25 to $1,036.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes gained 71¢ to $124.59/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