MARKET WATCH: Cold weather forecasts lift oil, gas prices

Forecasts of colder weather in the US lifted both oil and natural gas prices Jan. 14 with crude overcoming initial weakness to continue its recent daily see-saw pattern in the New York market.

“Heating oil prices soared, lifting crude oil markets with it, on the expectations of increased demand after what has up until now been a relatively mild winter,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. “Asian markets failed to sustain the upward thrust, perhaps a little concerned over the US fiscal woes that are still looming.”

In Houston, analysts with Raymond James & Associates Inc. reported, “The broader markets ended the trading session mixed amid earnings season. Crude and natural gas advanced 0.6% and 1.4%, respectively, the latter driven by cold weather forecasts for the Northeast.” The Oil Service Index dropped 1% and the SIG Oil Exploration & Production Index declined 0.2%. The Standard & Poor’s 500 Index and crude and gas prices were down in early trading Jan. 15 “after weak economic data from Germany,” Raymond James analysts said.

PIRA Energy Group in New York City reported West Texas Intermediate’s discount to Atlantic Basin light crudes narrowed slightly in December, “beginning the move toward the single-digit discounts expected later this year. Light grades in Canada, North Dakota, and Wyoming strengthened on the prospect of improved first quarter fundamentals, while Canadian heavy grades and all Midland grades weakened on worsening first quarter fundamentals. US crude and condensate production for October rose.”

Total US commercial oil stocks increased during the week ended Jan. 4, “with crude and the four major products showing the largest weekly build since 2009,” PIRA analysts said. “Total commercial stocks are now back above the 5-year range of US oil inventories.” They expect the weekly inventory report scheduled for release Jan. 16 will show a continued increase in crude and the three major light products.

On the other hand, they noted, “The production of ethanol-blended gasoline the week ending Jan. 4, was the lowest since February 2010, resulting from the lowest gasoline output since September 2008 and a sharp drop in the percentage of gasoline containing ethanol. Only 7.1 million b/d of ethanol-blended gasoline [were] manufactured, down sharply from 7.8 million b/d in the prior week. US ethanol output rose to 826,000 b/d from 807,000 b/d in the previous week as some plants picked up their production following the holidays.”

PIRA analysts said, “Overall, Saudi formula prices for February appear to be in line with market expectations, with only small changes that were directionally consistent with alternative crude economics. February formula prices for Asia rose relative to January prices. In contrast, February prices for Northwest Europe declined month-on-month, with the exception of for Arab Extra Light.”

Energy prices

The February contract for benchmark US sweet, light crudes rose 58¢ to $94.14/bbl Jan. 14 on the New York Mercantile Exchange. The March contract gained 60¢ to $94.59/bbl. On the US spot market, WTI at Cushing, Okla., matched the front-month futures contract, up 58¢ to $94.14/bbl.

Heating oil for February delivery rebound by 5.4¢ to $3.06/gal on NYMEX. Reformulated stock for oxygenate blending for the same month took back 1.46¢ to $2.75/gal.

The February natural gas contract climbed 4.6¢ to $3.37/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., escalated 19.2¢ to $3.39/MMbtu.

In London, the February IPE contract for North Sea Brent was up $1.24 to $111.88/bbl. Gas oil for February climbed $14.75 to $954.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes dipped 14¢ to $108.06/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

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.

EnLink agrees to purchase Coronado Midstream for $600 million

02/02/2015 EnLink Midstream has agreed to acquire Coronado Midstream Holdings LLC, which owns natural gas gathering and processing facilities in the Permian b...

Antero trimming, delaying Marcellus drilling

02/02/2015 Antero Resources Corp., Denver, has announced a $1.8 billion budget for 2015, which is down 41% from 2014. The independent said it plans to defer c...

Woodside gets NEB approval for British Columbia LNG exports

02/02/2015 Woodside Energy Holdings Pty. Ltd. has received approval from Canada’s National Energy Board on its application for a 25-year natural gas export li...

Syncrude sees additional $260-400 million in possible budget cuts

02/02/2015 The estimate for capital expenditures has also been reduced to $451 million net to COS, which includes $104 million of remaining expenditures on ma...

Kerry expects to receive other agencies’ Keystone XL reports soon

02/02/2015 US Sec. of State John F. Kerry said he expects to receive other federal agencies and departments’ reports soon on the proposed Keystone XL crude oi...
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


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

When 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



On Demand

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


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

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