MARKET WATCH: Power outages after Sandy bring down natural gas price

Crude oil prices rose slightly in electronic trading Oct. 30 in the New York market, but the front-month natural gas futures contract fell 3% on fear of extended power outages in the wake of Superstorm Sandy.

The Associated Press reported some 6.5 million homes and businesses are without power “as far west as Wisconsin and as far south as the Carolinas,” including 4 million in New York and New Jersey.

“Yesterday was another dark day on Wall Street as the market was closed for the second business day in a row,” said analysts in the Houston office of Raymond James & Associates Inc. It was the first weather related multiday closing of the New York Stock Exchange since the blizzard of 1888.

Floor trading reopened to cheers Oct. 31. “With US financial markets open again, we should see a heightened level of activity as participants play catch-up. This will most likely be accompanied by increased volatility across the commodity space,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group.

“Given the pent-up demand from the last couple of days, increased volume could create unusual price momentum out of the gates. But just in case things get too erratic, the Securities and Exchange Commission has the option to halt trading midday,” Raymond James analysts said.

“After sustained pressure, West Texas Intermediate managed a modest recovery yesterday as refineries on the East Coast began resuming operations,” Ground said. “While the extent of the damage to refining capacity has yet to be assessed, with crude oil prices at such low levels the market is unwilling to go short. Heating oil and reformulated stock for oxygenate blending (RBOB) both lost ground yesterday. Brent ended the day slightly down.”

He said, “As markets speculate the impact of Sandy on future crude oil and product demand in the US, yesterday’s release of American Petroleum Institute inventory numbers have been largely ignored.”  API reported commercial US crude inventories dropped 351,000 bbl to 371.7 million bbl in the week ended Oct. 26, with gasoline stocks down 173,000 bbl to 199.2 million bbl and distillate fuels falling 2.6 million bbl to 118.2 million bbl.

The Energy Information Administration report usually released at midweek was postponed because of the storm.

Energy prices

The December and January contracts for benchmark US light, sweet crudes rose 14¢ each to $85.68/bbl and $86.19/bbl, respectively, Oct. 30 on the New York Mercantile Exchange.

Heating oil for November delivery lost 2.86¢ to $3.09/gal on NYMEX. RBOB for the same month declined 2.8¢ to $2.73/gal.

The new front-month December natural gas contract dropped 11.2¢ to $3.69/MMbtu. US spot market prices for oil and gas were not updated.

In London, the December IPE contract for North Sea Brent was down 36¢ to $109.08/bbl. Gas oil for November fell $7 to $963.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes regained 15¢ to $106.12/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

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...

MARKET WATCH: Front-month crude oil price drops to lowest settlement since April

07/16/2015 Light, sweet crude oil prices dropped more than $1/bbl on the New York and London markets July 15, dipping to their lowest settlement since early A...

KMI brings second Texas condensate splitter online

07/15/2015 Kinder Morgan Inc., Houston, has commissioned the second of two splitters at the company’s new petroleum condensate processing facility located nea...

Michigan DEQ report urges ban of heavy oils in Mackinac Straits pipeline

07/15/2015 Michigan’s Department of Environmental Quality’s Petroleum Pipeline Task Force issued a report that recommended that heavy crude and oil sands be k...
White Papers

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

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

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


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

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


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


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