MARKET WATCH: Oil prices rise, natural gas declines amid mixed market signals

Prices for crude oil posted modest gains but those for natural gas declined Sept. 6 as markets continued to assess mixed economic signals.

The US Department of Labor reported 96,000 new jobs in August, fewer than expected. It also said US unemployment dropped from 8.3% in July to 8.1% last month. But the decline was triggered primarily by the growing number of workers who have given up looking for nonexistent jobs and who therefore are not included in unemployment figures. The US work force is now at its lowest level in 31 years, officials said.

The government revised earlier estimates of new jobs in June and July down by 41,000 openings, primarily due to the termination of 39,000 federal, state, and local government jobs in those 2 months. “In previous recoveries, governments have typically added jobs, not shed them,” the Associated Press reported.

Moreover, officials said average hourly pay was down and manufacturers eliminated the largest number of jobs in 2 years. Optimists hope these latest signs of a stalled economic recovery will prompt new economic stimulus by Federal Reserve officials at their scheduled meeting next week.

Meanwhile, the government-bond purchasing plan revealed by European Central Bank Pres. Mario Draghi continued to stimulate financial markets overseas (OGJ Online, Sept. 6, 2012). Since that announcement, the euro has steadily strengthened against the dollar. Investors expect financially troubled Spain will request aid under that new program soon.

Analysts in the Houston office of Raymond James & Associates Inc. noted the price spread between Brent and West Texas Intermediate recently has contracted as the outlook for North Sea oil loadings has improved. “According to media reports, the October loading program for North Sea Brent is expected to increase to 135,000 b/d from 100,000 b/d in September,” they said. “North Sea supply has been weak this summer, keeping the Brent contract in steep backwardation. While we acknowledge that a seasonal pick up in North Sea supply could put further downward pressure on the WTI-Brent spread in the near-term, we continue to believe that persistent surge of US oil supply and the resulting logistics bottlenecks will keep the spread wider ($15/bbl) for longer (several years).”

In other news, the Bureau of Safety and Environmental Enforcement said workers had returned to all but 10 of the 596 manned platforms and 1 of the of the 76 rigs in the Gulf of Mexico as of mid-day Sept. 6. Most of those offshore facilities were evacuated ahead of Hurricane Isaac. Government officials reported 42.98% of daily oil production and 21.28% of daily gas production from federal leases in the gulf remain shut in, however. They attributed the slow recovery to storm damage at onshore processing facilities.

US inventories

The Energy Information Administration reported the injection of 28 bcf of natural gas into US underground storage in the week ended Aug. 31, well below Wall Street’s consensus for a 33 bcf addition. That increased working gas in storage to 3.4 tcf, up 395 bcf from the comparable period in 2011 and 329 bcf above the 5-year average.

EIA reported commercial US crude inventories fell 7.4 million bbl to 357.1 million bbl in the same week, out-stripping Wall Street’s expectation of a 5 million bbl drop. Gasoline stocks continued falling, down 2.3 million bbl to 198.9 million bbl, with both finished gasoline and blending components in decline. Analysts were expecting a draw of 3 million bbl. Distillate fuel inventories increased 1 million bbl to 127.1 million bbl vs. market anticipation of a 1.6 million bbl draw but remained below average for the period.

The American Petroleum Institute earlier reported crude stocks fell 7.2 million bbl to 359.3 million bbl in that same week, with gasoline inventories down 2.3 million bbl to 201.8 million bbl. It said distillate fuel stocks dropped 132,000 bbl to 126.4 million bbl (OGJ Online, Sept. 6, 2012).

Energy prices

The October contract for benchmark US light, sweet crudes advanced 17¢ to $95.53/bbl Sept. 6 on the New York Mercantile Exchange. The November contract increased 16¢ to $95.85/bbl. On the US spot market, WTI at Cushing, Okla., followed the front-month futures contract up 17¢ to $95.53/bbl.

Heating oil for October delivery was reported up 2.49¢ to $3.14/gal on NYMEX. Reformulated stock for oxygenate blending for the same month rose 4.12¢ to $2.99/gal.

The October natural gas contract continued its decline, down 1.9¢ to $2.78/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., dropped 3.6¢ to $2.84/MMbtu.

In London, the October IPE contract for North Sea Brent gained 40¢ to $113.49/bbl. Gas oil for September escalated $9.25 to $990.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes lost 55¢ to $111.20/bbl.

Contact Sam Fletcher at

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

Definitive Guide to Cybersecurity for the Oil & Gas Industry

In the Oil and Gas industry, there is no single adversary and no single threat to the information tech...

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

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
Available Webcasts

Better Data, Better Analytics, Better Decisions

When Tue, Oct 27, 2015

The Oil & Gas industry has large amounts of data stored in multiple systems which are purpose built for certain tasks. However, good decisions require insights based upon the data in all of these systems. These systems in turn do not talk to each other. So the process of analyzing data, gaining insights, and making decisions is a slow one and often a flawed one. Good decisions require accurate analytics and accurate analytics require superior/sustainable data quality and governance. This webinar focuses on:

  • The importance of data quality and governance
  • How technological advances are making data quality and governance sustainable in order to get the accurate analytics to make solid decisions.

Please join us for this webcast sponsored by Seven Lakes Technologies and Noah Consulting.


Operating a Sustainable Oil & Gas Supply Chain in North America

When Tue, Oct 20, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.


On Demand

Leveraging technology to improve safety & reliability

Tue, Sep 22, 2015

Attend this informative webinar to learn more about how to leverage technology to meet the new OSHA standards and protect your employees from the hazards of arc flash explosions.


The Resilient Oilfield in the Internet of Things World

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.


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