MARKET WATCH: Ceasefire incident raises crude prices

Crude futures prices “jumped rather dramatically” late in an otherwise lackluster session Nov. 23 in New York on reports of a shooting on the Gaza-Israel border that traders feared might endanger last week’s ceasefire agreement. A weaker dollar also lifted most commodities, analysts said.

A Palestinian man was shot dead and 19 people were injured in a confrontation between civilians and Israeli soldiers in what was described as no-man’s land near the border. Other clashes were reported over the weekend, yet the ceasefire seemed generally to be holding.

“The ceasefire between Hamas and Israel remains fragile, although an encouraging sign is that Israel has allowed Palestinian boats much greater leeway to fish than has been allowed over the past 3 years,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group.

Negotiations between Israeli and Egyptian officials concerning the ceasefire resumed Nov. 26 in Cairo. Egyptian protestors and police have clashed in that city after President Mohammed Morsi granted himself sweeping new powers on Nov. 22. However, Egypt's justice minister said resolution of the internal crisis is imminent.

Despite street violence, the Egyptian crisis is expected to have no effect on oil and gas production in that country. “Even the anti-Mubarak revolution itself in early 2011 did not result in any significant production disruptions, contrary to market fears at the time,” said analysts in the Houston office of Raymond James & Associates Inc. “The Morsi government has substantially maintained Egypt's energy policy, including support for foreign investment, with new oil and gas project concessions having been signed earlier this month.”

Raymond James analysts noted, “Congress is also back in session and with the market falling precipitously when negotiations seemed to be leading to edge of the cliff, we expect pressure to mount ahead of the Jan. 1 deadline. In an abbreviated week with low volumes as expected, the Standard & Poor’s 500 Index gained 4% on hopes that policymakers in the US and Europe alike are closer to solving their respective economic issues. Similarly, energy stocks also gained on stronger crude and gas prices, with the SIG Oil Exploration & Production Index and the Oil Service Index both gaining 4% for the week.”

They said, “Expectations are decidedly low” as the United Nations’ annual climate change conference opened Nov. 26 in Qatar. “Ever since the much-hyped Copenhagen summit went nowhere in 2009, the plan has been to defer the difficult decisions on a new overarching global treaty until 2015. This year, yet again, expectations for a negotiating breakthrough are very low,” Raymond James analysts reported. “The central tension remains between the industrialized world and the major emerging markets. The West insists that the next treaty—unlike the Kyoto Protocol, which expires at yearend—encompass the countries that account for all the growth in global carbon emissions, notably China and India. Those countries reject any binding carbon caps for the foreseeable future, hence the stalemate.”

Meanwhile, Euro-zone finance ministers also are meeting in an effort to provide Greece with a necessary bailout installment—“keeping attention on the region’s ailing economy and poor prospects for oil demand growth,” said Ground.

Energy prices

The January contract for benchmark US light, sweet crudes regained 90¢ to $88.28/bbl Nov. 23 on the New York Mercantile Exchange. The February contract took back 92¢ to $88.90/bbl.

Heating oil for December delivery inched up 0.49¢ to $3.08/gal on NYMEX. Reformulated stock for oxygenate blending for the same month dipped 0.56¢ to $2.74/gal. The December natural gas contract slipped 0.2¢ to $3.90/MMbtu on NYMEX. Updates of US spot market prices for oil and gas were not available.

In London, the January IPE contract for North Sea Brent gained 83¢ to $111.38/bbl. Gas oil for December rose $4.25 to $951.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was up 14¢ to $108.08/bbl. So far this year, OPEC’s basket price has averaged $109.73/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Senate passes Defense bill with BLM drilling permit program provision

12/15/2014 The US Senate approved a Department of Defense appropriations bill on Dec. 13 containing a provision extending and making permanent a drilling perm...

Cook to head DONG Energy E&P group

12/15/2014 David B. Cook has been named group executive vice-president and chief executive officer for exploration and production at DONG Energy, Fredericia, ...

Sunshine Oilsands appoints chief executive officer

12/15/2014

Sunshine Oilsands Ltd., Calgary, has appointed Luo Hong as chief executive officer and Jiang Qi as president and chief operating officer.

Woodside to buy Apache’s interests in Wheatstone, Kitimat LNG for $2.75 billion

12/15/2014 Woodside Petroleum Ltd. has agreed to acquire interest in the Wheatstone LNG and Kitimat LNG projects, respectively in Western Australia and Britis...

MARKET WATCH: OPEC basket price closes below $59/bbl

12/15/2014 The average crude oil basket price for the 12 members of the Organization of Petroleum Exporting Counties closed below $59/bbl on Dec. 12 while cru...

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...

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