MARKET WATCH: Oil prices fall, wiping out previous gain

Energy prices fell Apr. 18 wiping out most gains from the previous session as traders shrugged off a bullish report on inventories to follow the broader market down.

Analysts in the Houston office of Raymond James & Associates Inc. reported Standard & Poor’s 500 Index retreated “as lackluster earnings and a looming Spanish debt auction led to caution among investors.” But in just the previous session, the S&P 500 posted its largest gain in more than a month, up 1.6% on what then was described as strong earnings.

Crude fell 1.5% in New York while natural gas was relatively unchanged with its front-month contract hovering near a 10-year low. However, Raymond James analysts reported, “Service names outperformed the broader market [in the Apr. 18 session], buoyed by a better-than-expected earnings report from Halliburton Co. with the Oil Service Index finishing the day slightly in the green.” The SIG Oil Exploration & Production Index underperformed, falling 1.3% for the session.

Marc Ground at Standard New York Securities Inc., the Standard Bank Group, pointed out, “The oil market failed to recover yesterday, even after a sizeable draw in US commercial oil inventories, which presents a clear sign of weakness.” He said, “Despite a much larger-than-expected draw in US oil product inventories, oil product prices also declined.”

US inventories

The Energy Information Administration reported Apr. 19 the injection of 25 bcf of natural gas into US underground storage in the week ended Apr. 13, slightly exceeding Wall Street’s consensus of 24 bcf. The addition brought working gas in storage to 2.512 tcf; that’s 871 bcf more than in the comparable period a year ago and 919 bcf  above the 5-year average.

EIA earlier reported US commercial crude inventories expanded by 3.9 million bbl to 369 million bbl last week. Gasoline stocks dropped 3.7 million bbl to 214 million bbl. Both finished gasoline and blending components decreased. Distillate fuel inventories fell 2.9 million bbl to 129 million bbl (OGJ Online, Apr. 18, 2012).

Raymond James analysts said, “Yesterday's petroleum inventories update was bullish relative to consensus, as larger-than-expected draws in gasoline and distillates were partially offset by a larger-than-expected build in crude. Combining crude, gasoline, and distillates, inventories fell 2.7 million bbl vs. the consensus forecast for a build of 600,000 bbl. Contributing to the sequential draw in total petroleum inventories was a bounce on the demand side of the equation as gasoline and distillate demand rose 1% and 2%, respectively, week-over-week.”

They also noted inventories at Cushing, Okla., “continued to rise (up 600,000 bbl) and have now eclipsed last year's levels for the first time this year.”

Last week’s stock draw was less than in the comparable week a year ago, so the total stock surplus to last year increased to 37 million bbl and total US oil stocks are about at par to the levels of 2009 and 2010,: said Olivier Jakob at Petromatrix in Zug, Switzerland. “US crude oil stocks are 12 million bbl higher than a year ago, and the main stock deficit remains in distillates, which are 19 million bbl lower than a year ago and that deficit is widening. Stocks in the main visible categories (crude plus clean petroleum products) were down 2.8 million bbl during the week and are 3.3 million bbl below the levels of a year ago but have been overall very stable since the start of the year,” he said.

Jakob said, “Implied demand for clean petroleum products on the 4-week average is climbing back towards the levels of a year ago as the Department of Energy has been gradually trimming down its estimates of product exports. Implied demand for clean petroleum products on the 4-week average is now estimated to be down 1.6% vs. last year, with gasoline down 2.83%.” However, the latest MasterCard Spending Pulse report estimates US retail gasoline sales at the pump are down 5% from a year ago.

“Overall,” Jakob said, “the US is not outside of its seasonal patterns but with the main stock deficit remaining in distillates. Yesterday there was some significant pressure on the RBOB crack and front spread although that pressure was more evident at the start than at the end of the trading session.”

Energy prices

The May contract for benchmark US sweet, light crudes dropped $1.53 to $102.67/bbl Apr. 18 on the New York Mercantile Exchange. The June contract lost $1.52 to $103.12/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down $1.53 to $102.67/bbl.

Heating oil for May delivery declined 0.84¢ to $3.12/gal on NYMEX. Reformulated stock for oxygenate blending for the same month fell 3.13¢ to $3.20/gal.

The May natural gas contract was unchanged at $1.95/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., decreased 2.1¢ to $1.86/MMbtu.

In London, the June IPE contract for North Sea Brent lost 81¢ to $117.97/bbl. Gas oil for May fell $8.75 to $985.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was down 53¢ to $115.74/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

BG’s 2015 budget ‘significantly lower than 2014’

02/03/2015 BG Group plans capital expenditures on a cash basis of $6-7 billion in 2015, a range it says is “significantly lower than 2014” due to “a lower oil...

BP trims capital budget by $4-6 billion

02/03/2015 BP PLC plans an organic capital expenditure of $20 billion in 2015, down from the previous guidance $24-26 billion. Total organic capital expenditu...

EPA suggests DOS reconsider Keystone XL climate impact conclusions

02/03/2015 The US Department of State might want to reconsider its conclusions regarding potential climate impacts from the proposed Keystone XL crude oil pip...

IHS sees second-half end of US output surge

02/03/2015

Expectations are moderating about growth of oil production in the US this year.

Anadarko reports 2014 loss, remains upbeat about Wattenberg

02/03/2015 Anadarko Petroleum Corp. announced a 2014 net loss of $1.75 billion, or $3.47/share diluted, including a net loss of $4.05 billion associated with ...

CNOOC cuts capital budget, starts production from Jinzhou 9-3

02/03/2015 CNOOC Ltd. is slashing its capital budget for 2015 by 26-35% to $11.25-12.86 billion compared with last year’s budget. Capital expenditures for exp...

Seven Group buys into Beach Energy

02/03/2015 Media group Seven Group Holdings, Perth, has bought 13.8% of Adelaide-based Beach Energy Ltd. through share purchases fuelling speculation of a pos...

Karve joins Cobalt for Cameia development

02/03/2015 Shashank V. Karve has joined Cobalt International Energy Inc. as executive vice-president in charge of development of deepwater Cameia oil field on...

MARKET WATCH: NYMEX crude oil stays positive on lower rig count

02/03/2015 Oil prices on the New York and London markets closed higher Feb. 2 on positive momentum generated by a falling US rig count, suggesting cuts in pro...
White Papers

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

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Cognitive Solutions for Upstream Oil and Gas

When Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

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