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

API: US petroleum demand rose in June, second quarter

07/16/2015 Total US petroleum deliveries, a measure of demand, increased 4.2% from June 2014 to average 19.6 million b/d last month. In the second quarter, de...

ConocoPhillips plans further capex reduction for deepwater exploration

07/16/2015 ConocoPhillips reported plans to further reduce its capital expenditures for deepwater exploration, with the “most significant reductions” coming f...

DOE official: LNG exports could be limited by silt-clogged waterways, ports

07/16/2015 Silt, which is increasingly filling US waterways and ports, potentially could limit US LNG exports if it is not dredged soon, a top US Department o...

Fitch notes increase in energy-default rate

07/16/2015 Recent actions of two exploration and production companies have pushed the trailing 12-month energy default rate among issuers of high-yield bonds ...

ENOC trims Turkmen plan in Dragon takeover

07/16/2015 Emirates National Oil Co. Ltd. (ENOC), Dubai, will lower target oil production from the Cheleken area offshore Turkmenistan after acquiring full co...

KMI to buy Shell’s stake in Elba LNG project for $630 million

07/16/2015 Kinder Morgan Inc., Houston, has reached a deal with Royal Dutch Shell PLC to purchase 100% of Shell’s equity interest in Elba Liquefaction Co. LLC...

Genesis to buy Enterprise offshore pipelines

07/16/2015 Genesis Energy LP has agreed to buy the Gulf of Mexico pipelines and services business of Enterprise Products Partners LP for $1.5 billion cash.

Mexican round nets two successful bids

07/16/2015 Two of 14 shallow-water blocks received successful bids on July 15 in Mexico’s historic Round One offering of exploration and production rights (OG...

CAPP: Canada needs global LNG markets for gas production growth

07/16/2015 Canada needs to connect to global LNG markets to avoid a decade of decline in natural gas production, according to the Canadian Association of Petr...
White Papers

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

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
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When 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.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

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