MARKET WATCH: Oil price slips lower but ends higher for week

Energy prices slipped lower Oct. 12 in continued seesaw fluctuations, but crude finished the week $1.98/bbl higher in the New York market than its closing price a week earlier.

However, Walter de Wet at Standard New York Securities Inc., the Standard Bank Group, reported Oct. 15, “Crude oil prices are marginally lower this morning. The Brent crude front-month contract is trading at around $114.50/bbl.”

He said, “Ongoing tensions over Iran’s nuclear program [and] the threat of a spillover of the Syrian civil war into other countries in that region are now raising concerns. The market’s attention at present is captured by the escalating conflict between Syria and Turkey. The main concern is that an escalating conflict between the two countries could result in a disruption of the Kirkuk-Ceyhan pipeline (which transports oil from Iraq), as it runs through southern Turkey near the Syrian border. However, we feel that this concern is perhaps overdone. While the capacity of the pipeline is reportedly 1.6 million b/d (which would be over half of Iraq’s current production), approximately only 400,000 b/d was pumped through it in 2011.”

Based on tensions between Turkey and Syria and “the extreme level of speculative length” in the crude futures market, De Wet sees increased risk for a corrective decline in oil prices. A reduction in Middle East tension could result in an abrupt sell-off, he said.

In Houston, analysts at Raymond James & Associates Inc. said last week was “the worst week since June” for the equity market because of concerns of weakness in third quarter earnings. Standard & Poor’s 500 Index closed down 2% for the week, while the SIG Oil Exploration & Production Index gained 2.7% on strong commodity prices. “Natural gas shot up 6% on bullish storage data” last week, they said. This week, financial analysts will be watching the earnings reports of more than 230 companies and new data on China’s gross domestic products.

In other news, Hugo Chavez recently won his third consecutive 6-year term as president of Venezuela, “with little prospect for an end to his antibusiness energy policy” until 2019, said Raymond James analysts.

Venezuela's 34% oil production decline since 1998 “is nearly the world's worst track record,” they said. “Petroleos de Venezuela SA’s production target of over 6 million b/d is comically unrealistic, in our view; it would take a policy shift of drastic proportions to turn around PDVSA, and under Chavez that seems unlikely. For the time being, Venezuela's declines are being more than offset by robust production growth in the US and some other geographies, but there will come a time when they become relevant for the global oil market once again.”

Raymond James analysts also cited a Wall Street Journal report gasoline and diesel prices remain driven by the higher price of North Sea Brent, the global benchmark crude, “despite the significant growth in US oil production.” They said, “This dynamic has driven enhanced margins for those refiners able to process cheaper crude (West Texas Intermediate) and sell product priced off of Brent, particularly Midcontinent refiners.”

Energy prices

The November contract for benchmark US light, sweet crudes slipped 21¢ to $91.86/bbl Oct. 12 on the New York Mercantile Exchange. The December contract dipped 22¢ to $92.28/bbl. On the US spot market, WTI at Cushing, Okla., was down 21¢ to $91.86/bbl.

Heating oil for November delivery declined 3.32¢ to $3.22/gal on NYMEX. Reformulated stock for oxygenate blending for the same month decreased 6.28¢ to $2.89/gal.

The November natural gas contract inched up 0.7¢ to $3.61/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., increased 1.5¢ to $3.35/gal.

In London, the November IPE contract for North Sea Brent dropped $1.09 to $114.62/bbl. The new front-month November contract for gas oil fell $13.75 to $1,001/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes retreated 29¢ to $111.06/bbl. So far this year, OPEC’s basket price has averaged $110.13/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Anadarko reports 2014 loss, remains upbeat about Wattenberg

02/03/2015 Anadarko Petroleum Corp. announced a 2014 net loss of $1.75 billion, or $3.47/share diluted, including a net loss of $4.05 billion associated with ...

CNOOC cuts capital budget, starts production from Jinzhou 9-3

02/03/2015 CNOOC Ltd. is slashing its capital budget for 2015 by 26-35% to $11.25-12.86 billion compared with last year’s budget. Capital expenditures for exp...

Seven Group buys into Beach Energy

02/03/2015 Media group Seven Group Holdings, Perth, has bought 13.8% of Adelaide-based Beach Energy Ltd. through share purchases fuelling speculation of a pos...

Karve joins Cobalt for Cameia development

02/03/2015 Shashank V. Karve has joined Cobalt International Energy Inc. as executive vice-president in charge of development of deepwater Cameia oil field on...

MARKET WATCH: NYMEX crude oil stays positive on lower rig count

02/03/2015 Oil prices on the New York and London markets closed higher Feb. 2 on positive momentum generated by a falling US rig count, suggesting cuts in pro...

Obama’s proposed fiscal 2016 budget recycles oil tax increases

02/02/2015 US President Barack Obama has proposed his federal budget for fiscal 2016 that he said was designed to help a beleaguered middle class take advanta...

MOL absorbs Eni’s Romanian retail assets

02/02/2015

MOL Group, Budapest, has completed the acquisition of Eni Romania, including 42 service stations to be rebranded under the MOL name.

CNOOC subsidiary inks deal for grassroots refinery

02/02/2015 Hebei Zhongjie Petrochemical Group Co. Ltd., a subsidiary of China National Offshore Oil Corp. (CNOOC), has entered into a $700 million agreement w...

Pessimism mounts over UK offshore industry

02/02/2015

Pessimism about the UK offshore oil and gas industry is gaining momentum.

White Papers

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

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
Available Webcasts


OGJ's Midyear Forecast 2015

When 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


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


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

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


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