MARKET WATCH: Crude price falls despite storm threat

Possible release of oil from the Strategic Petroleum Reserve outweighed the threat of a hurricane hitting the Louisiana coast, undercutting crude prices Aug. 27 even as workers evacuated offshore facilities and Gulf Coast refineries reduced runs.

Oil prices rose in early trading Aug. 28, however, with Tropical Storm Isaac located 165 miles southeast of New Orleans and expected to reach Category 1 strength as it moves slowly through a primary oil and gas production area in the Gulf of Mexico. The storm is predicted to make landfall along the Louisiana coast tonight or in the early hours of Aug. 29, the seventh anniversary of the much stronger Hurricane Katrina that devastated New Orleans in 2005. Meanwhile, strong winds extending 185 miles from the storm were already whipping the coasts of Louisiana, Mississippi, and Alabama.

The Bureau of Safety and Environmental Enforcement reported workers were evacuated by midday Aug. 27 from 346 of the 596 manned production platforms and 41 of the 76 rigs operating in the gulf. It said 78% of daily oil production and 48% of daily gas production from federal leases in the gulf were shut in.

With the storm predicted to dump 14-20 in. of rain in some land areas, four Louisiana refineries with total capacity of 769,500 b/d shut down and another three with total capacity of 958,500 b/d were operating at reduced capacity.

Crude traded lower Aug. 27 on “growing speculation” Isaac will provide justification for President Barack Obama to release SPR oil into the US market, said analysts in the Houston office of Raymond James & Associates Inc. Fueled by remarks of various administration officials, traders generally expect an SPR release to reduce energy costs prior to the presidential election.

Meanwhile, the front-month natural gas contract fell 2% to a 2-month low in the New York futures market Aug. 27 “as supply surplus concerns trumped hurricane production shutdowns,” Raymond James analysts said. Broader markets closed relatively flat as investors await the Aug. 30 opening of the Jackson Hole economic policy symposium hosted by the Federal Reserve Bank of Kansas City. Many hope—but few expect—Fed Chairman Ben Bernanke to announce new steps to stimulate the US economy. Officials of the European Central Bank announced they will not attend that conference because of a heavy workload.

The Conference Board Inc. in New York said Aug. 28 its Consumer Confidence Index fell to its lowest point since November 2011, to 60.6 in August from 65.4 in July. Economists had expected a much higher reading. On the other hand, the Standard & Poor's and Case-Shiller home price index increased, indicating the housing market is strengthening. In Europe, Spain’s and Italy’s financial problems worsened.

Energy prices

The October contract for benchmark US sweet, light crudes fell 68¢ to $95.47/bbl Aug. 27 on the New York Mercantile Exchange. The November contract dropped 66¢ to $95.79/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down 68¢ to $95.47/bbl.

Heating oil for September delivery inched up 0.17¢ but closed essentially unchanged at a rounded $3.11/gal on NYMEX. Reformulated stock for oxygenate blending for the same month climbed 7.68¢ to $3.15/gal.

The September natural gas contract lost 4.9¢ to $2.65/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., increased 1¢ to $2.80/MMbtu.

In London, the October IPE contract for North Sea Brent was down $1.33 to $112.26/bbl. Gas oil for September gave up $6.75 to $982.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes retreated 8¢ to $112.04/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

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

7 Steps to Improve Oil & Gas Asset Decommissioning

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


OGJ's Midyear Forecast 2015

When 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


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

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

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


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