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

BOEM schedules public meetings about draft proposed 5-year OCS plan

02/06/2015 The US Bureau of Ocean Energy Management will hold the first of 20 public meetings in Washington on Feb. 9 to receive public comments on potential ...

Union strike ongoing at US refineries as negotiations continue

02/06/2015 A strike by union workers at nine US refining and petrochemical production plants remains under way as the United Steelworkers Union (USW) continue...

NCOC lets $1.8-billion pipeline contract for Kashagan field

02/06/2015 North Caspian Operating Co. (NCOC) has let a $1.8-billion engineering and construction contract to ERSAI Caspian Contractor LLC, a subsidiary of Sa...

AOPL releases 2015 safety performance and strategic planning report

02/06/2015 The Association of Oil Pipe Lines is committed to further improvements despite a 99.99% safe petroleum liquids delivery rate, AOPL Pres. and Chief ...

MARKET WATCH: NYMEX oil price bounces back up somewhat

02/06/2015 Crude oil prices on the New York market bounced up $2/bbl to settle slightly above $50/bbl Feb. 5. The positive momentum continued during early Jan...

Congressional Republicans renew bid to halt sue-and-settle maneuvers

02/05/2015 Calling it an affront to regulatory accountability that results in unchecked compliance burdens, US Sen. Charles E. Grassley (R-Iowa) and US Rep. D...

Oil-price collapse may aggravate producing nations’ other problems

02/05/2015 The recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing natio...

Goodlatte reintroduces bills to repeal, reform RFS

02/05/2015 Calling it “a true ‘kitchen table’ issue,” US Rep. Bob Goodlatte (R-Va.) reintroduced a pair of bills to address problems in the federal Renewable ...

MARKET WATCH: NYMEX oil drops, ending 4-day rally

02/05/2015 Crude oil prices dropped on the New York market Feb. 4 to settle below $50/bbl and to end a 4-day rally after a weekly government report showed oil...
White Papers

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

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


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

When 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



On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

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