MARKET WATCH: Oil, gas prices declined in skittish markets

Front-month oil and gas futures prices declined Oct. 24 with crude dropping 1% following a bearish report of increased inventory while natural gas fell 2% in the New York market among mixed economic indicators.

Yesterday’s mild improvement in the Hong Kong & Shanghai Banking Corp. Ltd.’s flash Purchasing Manager Index manufacturing reading for China was not enough to sustain interest in energy markets. Negative sentiment soon returned and was only compounded by the dramatic increase in the [Energy Information Administration’s] reported crude oil inventories,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group.

EIA said commercial US crude inventories jumped 5.9 million bbl to 375.1 million bbl in the week ended Oct. 19, far exceeding Wall Street’s consensus for an increase of 1.8 million bbl. Gasoline stocks for the same week climbed 1.4 million bbl to 198.6 million bbl, above analysts’ outlook for a 500,000 bbl gain. Both finished gasoline and blending components were up. Distillate fuel inventories declined 600,000 bbl to 118 million bbl. Analysts were expecting a bigger decrease of 1.2 million bbl (OGJ Online, Oct. 24, 2012).

Lower-than-average distillate levels could lead to increased drawdown of crude stocks as winter demand for heating oil increases. “However, this turnaround could still be weeks away, so for now the extremely high crude oil inventories coupled with a sharp drop in implied demand for gasoline (it appears as though high prices continue to weigh on demand) are a concern.”

EIA reported Oct. 25 the injection of 67 bcf of natural gas into US underground storage last week, matching Wall Street’s consensus and raising the working gas in storage to 3.843 tcf. US gas storage is now 153 bcf above year-ago levels and 251 bcf above the 5-year average.

In other news, US Treasuries prices declined due to profit taking Oct. 24 and in early trading Oct. 25 after Federal Reserve officials voted to keep interest rates “ultralow” until mid-2015. Equity market stocks “barely reacted to [the Fed’s] announcement amid a mixed day of corporate earnings, closing marginally down,” said analysts in the Houston office of Raymond James & Associates Inc.

“Another central bank across the pond was also busy defending its active money-printing plan. The European Central Bank president dismissed German lawmakers' perpetual fear about having to carry around money in wheelbarrows and argued that deflation was actually the greater risk,” Raymond James analysts reported. The SIG Oil Exploration & Production Index and the Oil Service Index continued declining, down 3% and 2%, respectively.

Ground said, “The Fed’s statement appears to have done enough to steady markets, but we don’t foresee any sustained quantitative-easing induced rallies to emerge.”

The US Department of Commerce reported US orders for durable goods escalated 9.9% in September, the biggest increase in nearly 3 years. However, the gain came primarily from a rebound in aircraft orders that had fallen heavily in August when durable goods orders as a whole were down 13.2%. Eliminating transportation, orders for other durable goods were up only 2% in September with orders for capital goods unchanged.

The US Department of Labor reported 369,000 new applications for unemployment benefits last week, down from a revised 392,000 initial applications the previous week.

Energy prices

The December and January contracts for benchmark US light, sweet crudes lost 94¢ each to reach $85.73/bbl and $86.29/bbl, respectively, on the New York Mercantile Exchange. On the US spot market, West Texas Intermediate at Cushing, Okla., also was down 94¢ to $85.73/bbl in step with the front-month futures closing.

Heating oil for November delivery slipped 0.4¢ but closed essentially unchanged at a rounded $3.04/gal on NYMEX. Reformulated stock for oxygenate blending for the same month dipped 0.2¢ to $2.60/gal.

The November natural gas contract fell 8.5¢ to $3.45/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, La., regained 8.3¢ to $3.43/MMbtu.

In London, the December IPE contract for North Sea Brent lost 40¢ to $107.85/bbl. Gas oil for November was up $2.25 to $957/tonne.

The Vienna office of the Organization of Petroleum Exporting Countries is closed Oct. 25-26 with no updates on the basket price of its 12 benchmark crudes.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Obama makes Alaska’s Bristol Bay off-limits for oil, gas activity

12/17/2014 US President Barack Obama placed Bristol Bay off-limits for future oil and gas leasing, extending a temporary withdrawal he imposed in 2010 that wa...

Severance tax would backfire, Pennsylvania association leaders warn

12/17/2014 Enacting a severance tax aimed at Pennsylvania’s unconventional natural gas activity would substantially harm the commonwealth beyond the industry ...

New York state moves to ban hydraulic fracturing

12/17/2014 High-volume hydraulic fracturing will be banned in the state of New York, Gov. Andrew Cuomo’s administration announced Dec. 17, citing health risks...

Cooper to buy 50% of offshore Gippsland Sole gas field

12/17/2014 Cooper Energy Ltd., Adelaide, has bought a 50% interest in the offshore Gippsland Sole dry gas field in retention lease Vic/RL3 as well as 50% of t...

MARKET WATCH: Oil prices held steady on NYMEX awaiting crude inventory

12/17/2014 Oil prices held fairly steady on the New York market in Dec. 16 trading while Brent crude oil prices fell by more than $1/bbl on the London market....

BPC report examines 40 possible options to reform RFS

12/16/2014 The Bipartisan Policy Center issued a report outlining 40 possible options for reforming the federal Renewable Fuels Standard in an effort to move ...

Turkish refinery secures Canadian financing

12/16/2014 Export Development Canada (EDC) said it is participating as lead arranger in the $3.3 billion debt-financing consortium supporting STAR Rafineri AS...

Encana to focus spending on four core shale assets in 2015

12/16/2014 Encana Corp., Calgary, reported plans to spend $2.7-2.9 billion on its capital budget with roughly 80% of this total directed towards four of what ...

Cenovus trims budget, slows oil sands work

12/16/2014 Cenovus Energy Inc., Calgary, is trimming its capital spending in response to declining crude oil prices and will slow development of some of its t...

White Papers

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...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

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

Available Webcasts



The Future of US Refining

When 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


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

When Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST



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


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