MARKET WATCH: Cold weather predictions push up gas price

Crude oil futures prices continued to make modest gains while the front-month natural gas contract maintained a five-session rally, escalating 5% Oct. 1 in the New York market on forecasts for cold weather in the central US in coming weeks.

In Houston, analysts at Raymond James & Associates Inc. reported a “rosier” economic outlook with the US Institute for Supply Management (ISM) manufacturing index rising faster than expected, driving broader markets upward. Energy indices also improved with the Oil Service Index up 0.1% and the SIG Oil Exploration & Production Index posting a solid 1.1% gain.

Marc Ground at Standard New York Securities Inc., the Standard Bank Group, said, “Up until the release of the US ISM manufacturing numbers, oil markets benefited from the euro gaining ground against the dollar. The morning’s Euro-zone PMI readings, although only marginally better than expectations, gave market sentiment a boost. However, once the much better-than-expected US data came out (51.5 compared to a consensus of 49.7), after an initial rally we saw crude oil prices promptly fall and entered a downward trend.”

Despite initial reaction to “the obviously positive implications for demand,” Ground said, investors “appeared to switch focus to the possibility that this might weaken the case for extended monetary accommodation” from the US Federal Reserve Bank. He said, “The fact that precious metals (the main beneficiaries of any extensions of central bank liquidity) acted in similar fashion strengthens this assertion. It would appear that it is a consideration of monetary accommodation, rather than demand-supply fundamentals, that is keeping crude oil prices buoyant.”

Ground said, “This, coupled with a positive (or at the very least benign) supply outlook and the extreme length in non-commercial contracts…leaves the market vulnerable to downside. We do, however, contend that any downside will be lessened by the Fed’s promise of liquidity and ongoing geopolitical risks (in particular Iran).”

Meanwhile, Spain is expected to submit a bailout request this week, but Germany is advocating delay in funding that request. “In all likelihood, it seems that Spain might not actually get a full bailout but will instead get aid through the sort of ‘bailout-lite’ facility, which is called the Enhanced Conditions Credit line. Such a move would most likely lift the euro and, via dollar weakness, crude oil.” However, he cautioned the euro likely will strengthen only when Spain makes its request “and not on any anticipation of a request.”

Energy prices

The November and December contracts for benchmark US sweet, light crudes increased 29¢ each to $92.48/bbl and $92.85/bbl, respectively, Oct. 1 on the New York Mercantile Exchange. Once rare, matching price movements for the two front futures contracts have occurred more frequently in recent months. On the US spot market, West Texas Intermediate at Cushing, Okla., maintained its lockstep with the November NYMEX contract, up 29¢ to $92.48/bbl.

However, the new front-month November contract for heating oil dropped 2.34¢ to $3.14/gal on NYMEX. Reformulated stock for oxygenate blending for the same month was unchanged at $2.92/gal.

The November natural gas contract escalated 16¢ to $3.48/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., climbed 13.4¢ to $3.19/MMbtu.

In London, the November IPE contract for North Sea Brent lost 20¢ to $112.19/bbl. Gas oil for October increased $1.75 to $982.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes decreased 37¢ to $109.31/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Congressional Republicans renew bid to halt sue-and-settle maneuvers

02/05/2015 Calling it an affront to regulatory accountability that results in unchecked compliance burdens, US Sen. Charles E. Grassley (R-Iowa) and US Rep. D...

Oil-price collapse may aggravate producing nations’ other problems

02/05/2015 The recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing natio...

Goodlatte reintroduces bills to repeal, reform RFS

02/05/2015 Calling it “a true ‘kitchen table’ issue,” US Rep. Bob Goodlatte (R-Va.) reintroduced a pair of bills to address problems in the federal Renewable ...

MARKET WATCH: NYMEX oil drops, ending 4-day rally

02/05/2015 Crude oil prices dropped on the New York market Feb. 4 to settle below $50/bbl and to end a 4-day rally after a weekly government report showed oil...

Alberta’s premier seeks more North American energy integration

02/05/2015 Better policy integration and cooperation will be needed for Canada, Mexico, and the US to fully realize the North American energy renaissance’s po...

Deloitte studies oil supply growth for 2015-16

02/04/2015 A Deloitte MarketPoint analysis suggested large-field projects, each producing more than 25,000 b/d, could bring on 1.835 million b/d in oil supply...

Oil, gas infrastructure investments essential, House panel told

02/04/2015 Investments in oil and gas transportation and storage should move ahead because they are essential in continuing the US economic recovery and North...

Petrobras CEO, five other senior executives resign

02/04/2015 Maria das Gracas Foster, chief executive officer of Petroleo Brasileiro SA (Petrobras) since 2012, has resigned along with five other senior execut...

MARKET WATCH: NYMEX crude oil prices reach 2015 high

02/04/2015 Crude oil prices surged more than $3/bbl on the New York market Feb. 3, closing at the highest level so far this year, but some analysts believe th...
White Papers

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

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...
Available Webcasts


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When 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



On Demand

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

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


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


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