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

Senate passes Defense bill with BLM drilling permit program provision

12/15/2014 The US Senate approved a Department of Defense appropriations bill on Dec. 13 containing a provision extending and making permanent a drilling perm...

Cook to head DONG Energy E&P group

12/15/2014 David B. Cook has been named group executive vice-president and chief executive officer for exploration and production at DONG Energy, Fredericia, ...

Sunshine Oilsands appoints chief executive officer

12/15/2014

Sunshine Oilsands Ltd., Calgary, has appointed Luo Hong as chief executive officer and Jiang Qi as president and chief operating officer.

Woodside to buy Apache’s interests in Wheatstone, Kitimat LNG for $2.75 billion

12/15/2014 Woodside Petroleum Ltd. has agreed to acquire interest in the Wheatstone LNG and Kitimat LNG projects, respectively in Western Australia and Britis...

MARKET WATCH: OPEC basket price closes below $59/bbl

12/15/2014 The average crude oil basket price for the 12 members of the Organization of Petroleum Exporting Counties closed below $59/bbl on Dec. 12 while cru...

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...

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