MARKET WATCH: New York crude oil price falls with Fed criticism

Crude oil prices continued declining Sept. 25 in a mixed New York market after Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the system’s latest stimulus program is “unlikely” to contribute much to US employment or economic growth.

Marc Ground at Standard New York Securities Inc., the Standard Bank Group, said oil prices responded strongly with West Texas Intermediate dropping $2/bbl and Brent down $1/bbl following remarks by Plosser, a leading hawk in the Fed System and a critic of Chairman Ben Bernanke’s monetary policy. But when Fed members earlier announced an aggressive plan to stimulate stock prices and to maintain low-level interest rates, even Bernanke acknowledged it was no panacea for slow growth and high employment likely to continue through next year (OGJ Online, Sept. 13, 2012).

The market also was undercut by indications the German Central Bank may not participate further in Greek bailouts. The Standard & Poor’s 500 Index closed down 1.1%, “marking its worst loss since June as the outlook for global growth remained bleak,” said analysts in the Houston office of Raymond James & Associates Inc. “Demand concerns pressured crude, which fell 0.6% on the session.” The SIG Oil Exploration & Production Index and the Oil Service Index underperformed the broader market, dropping 1.6% and 1.5%, respectively.

“Despite the broad selloff, gas ended the day with a healthy 3% gain, albeit the jump was largely attributable to book squaring ahead of October's contract expiration,” Raymond James analysts reported.

Oil prices fell further in early trading Sept. 26 as thousands of protesters clashed with riot police in Athens and Madrid over proposed spending cuts and tax hikes.

US inventories

The Energy Information Administration said Sept. 26 commercial US crude inventories dropped 2.4 million bbl to 365.2 million bbl in the week ended Sept. 21, with stocks still above average for the time of year. The Wall Street consensus was for an increase of 1.9 million bbl. Gasoline inventories decreased 500,000 bbl to 195.8 million bbl last week, exactly opposite of the 500,000 bbl gain analysts expected. Finished gasoline decreased while blending components increased. Distillate fuel stocks also dropped 500,000 bbl, to 127.7 million bbl, frustrating a similar market outlook for an addition of 500,000 bbl.

Imports of crude into the US decreased 2.3 million b/d to 7.6 million b/d last week. In the 4 weeks through Sept. 21, crude imports averaged 8.5 million b/d, down 272,000 b/d from the comparable period in 2011. Gasoline imports last week averaged 491,000 b/d while distillate fuel imports averaged 108,000 b/d.

The input of crude into US refineries was down 292,000 b/d to 14.6 million b/d last week with units operating at 87.4% of capacity. Gasoline production declined to 8.9 million b/d, but distillate fuel production increased to 4.6 million b/d.

Energy prices

The November contract for benchmark US light, sweet crudes declined 56¢ to $91.37/bbl Sept. 25 on the New York Mercantile Exchange. The December contract decreased 54¢ to $91.71/bbl. On the US spot market, WTI at Cushing, Okla., was down 56¢ to $91.37/bbl.

Heating oil for October delivery inched up 0.99¢ to $3.11/gal on NYMEX. Reformulated stock for oxygenate blending for the same month gained 4.95¢ to $2.97/gal.

The October natural gas contract rose 8.7¢ to $2.92/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., increased 4.3¢ to $2.86/MMbtu.

In London, the November IPE contract for North Sea Brent ended the session with a gain, up 64¢ to $110.45/bbl. Gas oil for October escalated $11 to $977.25/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was up 52¢ to $107.99/bbl.

Ground said, “We maintain that current prices could move lower as the supply environment improves, although Middle East tension and monetary accommodation should limit any downside. We forecast an average of $105/bbl for Brent in the fourth quarter from an approximate third quarter average of $109/bbl.”

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

TransCanada challenges EPA’s comments on Keystone XL SEIS

02/11/2015 TransCanada Corp. responded to the Feb. 2 comment letter from the US Environmental Protection Agency on the US Department of State’s final suppleme...

PNR cuts capital spending nearly in half

02/11/2015 Pioneer Natural Resources Co. (PNR), Dallas, plans to spend $1.85 billion in 2015 following a fourth quarter in which the company reported a net in...

InterOil wins arbitration over rights dispute with Oil Search

02/11/2015 The International Chamber of Commerce arbitration panel in London has found in favor of InterOil Corp. in its battle with Oil Search Ltd. over pree...

PACE survey finds 69% support for crude exports to trading partners

02/11/2015 More than two thirds of registered voters responding in a nationwide telephone survey commissioned by Producers for American Crude Exports (PACE) s...

New study finds wide variations in gathering systems’ methane samples

02/11/2015 Samples of methane emissions from 114 natural gas gathering stations and 16 processing plants across 13 states found wide variations in amounts act...

EIA: US gasoline prices to average $1/gal less in 2015 vs. 2014

02/10/2015 US regular gasoline retail prices are expected to average $2.33/gal in 2015, down from $3.36/gal in 2014, according to the Energy Information Admin...

MARKET WATCH: NYMEX oil prices rise on revised OPEC forecast

02/10/2015 Crude oil prices climbed more than $1/bbl on Feb. 9 to settle above $52/bbl, marking a third consecutive trading session that ended with higher pri...

MEO, Eni to exchange sections of Timor Sea permit

02/10/2015 MEO Australia Ltd., Melbourne, and Eni SPA—MEO’s joint-venture partner in the NT/P68 permit in the Timor Sea—have decided to split the permit betwe...

MRPL increases ownership in aromatics complex

02/10/2015 Mangalore Refinery & Petrochemicals Ltd. (MRPL), a subsidiary of Oil & Natural Gas Corp. Ltd. (ONGC), has increased its ownership interest ...
White Papers

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...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...
Available Webcasts


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

When 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



On Demand

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


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

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