MARKET WATCH: Oil, gas prices tumble amid fear of economic slowdown

Energy prices continued to tumble Oct. 22 despite increased turmoil in the Middle East, with front-month benchmark crude down nearly 2% in New York as fear of a global economic slowdown overcame worry of supply disruptions.

“Natural gas prices fell nearly 5% [in New York] as oversupply fears caused some to perceive the recent rally as overextended,” said analysts in the Houston office of Raymond James & Associates Inc. The Energy Information Administration reported 51 bcf of natural gas injected into US underground storage in the week ended Oct. 12, above Wall Street’s consensus for 47 bcf. This increased working gas in storage to 3.776 tcf, up 181 bcf from the comparable period a year ago and 249 bcf above the 5-year average (OGJ Online, Oct. 18, 2012).

The Oil Service Index and the SIG Oil Exploration & Production Index followed commodities down by 0.5% and 1.6%, respectively. The boarder market also had its ups and downs with the Dow Jones Industrial Average at one point trading “down more than 100 points before staging a furious rally in the final hour to end the day roughly flat,” Raymond James analysts reported. Crude and broader markets were “notably lower” in early trading Oct. 23, but natural gas was on the rise.

“This time it was West Texas Intermediate that was under greater pressure,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. “Amid general pessimism over the prospects for the global economy, the restart of the TransCanada Keystone pipeline weighed further on WTI. Another delay in the restart of the Buzzard field in the North Sea, together with Royal Dutch Shell PLC declaring force majeure on its Nigerian Bonny Light and Forcados exports, limited the downside in Brent.”

For now, Ground expects “another slow day for data, with Euro-zone consumer confidence and the Richmond Federal Reserve Bank’s manufacturing index the only noteworthy releases. Unsurprisingly, today’s advance reading of the Euro-zone consumer confidence is expected to remain weak at minus 25.9 for October [the same as September] weighed down by the persistently poor current economic conditions and economic outlook components. A weak reading here could spell euro weakness and consequently weigh on commodity prices.”

Manufacturing activity in the Richmond Fed district is expected to improve marginally. “Consensus is for the index to climb to 5 in October from 4 in the previous month. September’s number showed a negative reading for employment, which was offset by positive readings on the shipments and new orders components. Here too a weaker reading, we believe, would be negative for oil prices, especially WTI, as it might see demand concerns resurface. We believe that the risks for both these releases are tilted towards the downside.”

Energy prices

The November contract for benchmark US sweet, light crudes dropped $1.32 to $88.73/bbl Oct. 22 on the New York Mercantile Exchange. The December contract fell $1.79 to $88.65/bbl. On the US spot market, WTI at Cushing, Okla., followed the front-month futures contract down $1.32 to $88.73/bbl.

Heating oil for November delivery lost 5.78¢ to $3.08/gal on NYMEX. Reformulated stock for oxygenate blending for the same month decreased 4.88¢ to $2.65/gal.

The February natural gas contract plunged 16.5¢ to $3.45/MMbtu on NYMEX, giving back most of its gains from the previous three sessions. On the US spot market, gas at Henry Hub, La., climbed 10¢ to $3.49/MMbtu.

In London, the December IPE contract for North Sea Brent retreated 70¢ to $109.44/bbl. Gas oil for November fell $19.25 to $977.25/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was down $1.86 to $107.13/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

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

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


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


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

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