MARKET WATCH: Energy prices fall as dollar strengthens

Energy prices retreated virtually across the board July 10 with losses in the crude and natural gas futures outstripping gains from the previous session as equity markets slumped and the US dollar strengthened among continued indications of a struggling economy.

The SIG Oil Exploration & Production Index and the Oil Service Index underperformed the broader markets, ending the day down 3.62% and 2%, respectively. Crude fell 2.3% and natural gas declining 4.9% in the New York market.

“Driven by Euro-zone concerns, [equity] markets closed in the red for the fourth consecutive trading session, with the Standard & Poor’s 500 Index falling 0.8%,” said analysts in the Houston office of Raymond James & Associates Inc. “Stocks opened with solid gains despite disappointing import-export data from China following news of a plan by European Union finance ministers to fast-track €30 billion for the recapitalization of Spanish banks. The markets later sank sharply as concerns over Italy's high bond yields took center stage.”

Marc Ground at Standard New York Securities Inc., the Standard Bank Group, said, “Despite yesterday’s slide brought on by dollar strength, crude oil prices have been trading in a fairly tight range—particularly Brent, which has oscillated between just below $98/bbl and just above $99.50/bbl. The trading range for West Texas Intermediate has been slightly wider, at $83.50-86/bbl.”

He said, “The main reason for this relative inactivity in crude oil markets specifically, as well as in markets generally, is that participants are adopting a wait-and-see approach ahead of today’s release of the Federal Open Market Committee’s  minutes. We doubt that this will offer anything substantive to bolster market expectations of quantitative easing but do not doubt that the release could result in a knee-jerk reaction. However, should the Federal Reserve Bank eventually announce outright quantitative easing, we believe that Brent crude front-month prices would be one of the main beneficiaries of such a move.”

US inventories

The Energy Information Administration said July 11 commercial US crude inventories fell 4.7 million bbl to 378.2 million bbl in the week ended July 6, far more than the Wall Street consensus of a 1.4 million bbl drop. Yet crude stocks remain above average for this time of year. Gasoline inventories increased by 2.8 million bbl to 207.7 million bbl in the same period, exceeding analysts’ expectation of a 500,000 bbl gain. Both finished gasoline and blending components increased. Distillate fuel stocks increased 3.1 million bbl to 120.9 million bbl. That exceeded the market’s outlook for a 600,000 bbl increase but distillate inventories remain below average for the period.

Imports of crude into the US were down 148,000 b/d to 8.6 million b/d last week. In the 4 weeks through July 6, US imports averaged 9 million b/d, down by 229,000 b/d from the comparable period in 2011. Gasoline imports last week averaged 919,000 b/d while distillate fuel imports averaged 91,000 b/d.

The input of crude into US refineries increased 143,000 b/d to 15.8 million b/d with units operating at 92.7% of capacity. Gasoline production decreased to 9.3 million b/d last week while distillate fuel production declined to 4.7 million b/d.

Energy prices

The August contract for benchmark US light, sweet crudes fell $2.08 to $83.91/bbl July 10 on the New York Mercantile Exchange. The September contract dropped $2.07 to $84.30/bbl. On the US spot market, WTI at Cushing, Okla., was down $2.08 to $83.91/bbl.

Heating oil for August delivery lost 2.95¢ to $2.72/gal on NYMEX. Reformulated stock for oxygenate blending for the same month declined 1.25¢ to $2.75/gal.

The August natural gas contract fell 14.6¢ to $2.74/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, La., regained 4¢ to $2.86/MMbtu.

In London, the August IPE contract for North Sea Brent lost $2.35 to $97.97/bbl. Gas oil for July continued to rise, up $1.75 to $875.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes declined 49¢ to $96.42/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

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