MARKET WATCH: Oil, gas prices increase among mixed economic data

Oil prices continued to advance Jan. 30, and natural gas prices rebound with a new front-month contract in the New York market among mixed economic indicators.

“Crude inched higher on recent momentum and European optimism despite the report of a large build in [US crude] inventories,” said analysts in the Houston office of Raymond James & Associates Inc. Energy stocks were mixed, with the Oil Service Index falling 0.8% but the SIG Oil Exploration & Production Index rising 0.2%.

“The oil market’s reaction to gross domestic product data was different from the likes of the markets for gold and the other precious metals, with participants appearing more concerned about the oil demand ramifications of a fragile US economy than what the data implied about the Federal Reserve System’s commitment to monetary accommodation,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. “However, later in the day after the Federal Open Market Committee announcement, the market regained its composure, and bolstered by the prospect of continued quantitative easing, prices were pushed higher to close the day firmly in the black.”

At the close of a 2-day meeting, the FOMC said it will maintain its monthly $85 billion bond-buying stimulus plan, claiming the recent stall in the tepid US economy is likely temporary. Esther George, the first woman president and chief executive officer of the Kansas City Federal Reserve Bank, voted against that policy in her first ballot as one of four new members of the 12-member FOMC. Long-time observers reported no new committee member in decades had cast a dissenting first-time ballot. However, George expressed concern that “continued high level of monetary accommodation increased the risks of future economic and financial imbalances and, over time, could cause an increase in long-term inflation expectations,” the FOMC reported.

Since 2008, the Fed has held overnight interest rates near zero. Through its purchases of securities to force longer-term borrowing costs lower, it has tripled its balance sheet to $3 trillion. Yet the US economy remains week and unemployment high.

On Jan. 31, the dollar showed little reaction to an increase in US jobless claims as the euro weakened against it. The US Department of Labor reported first-time applications by US residents for unemployment benefits unexpectedly increased by 38,000 to a seasonally adjusted 368,000 in the week ended Jan. 26. Officials were expecting a drop in new applications following decreases in the previous 2 weeks to a 5-year low. More than 5.9 million US residents received benefits in the week ended Jan. 12, the latest data available, an increase of 250,000 from the previous report.

US inventories

The Energy Information Administration reported Jan. 31 the withdrawal of 194 bcf of natural gas from US underground storage in the week ended Jan. 25, less than the Wall Street consensus of a 204 bcf decrease. That left 2.8 tcf of working gas in storage, 202 bcf less than the comparable period in 2012 but 304 bcf above the 5-year average.

EIA earlier said commercial US crude inventories escalated 5.9 million bbl to 369.1 million bbl that same week, more than double Wall Street’s consensus for a 2.5 million bbl increase and surpassing the aggregate gain reported in the previous 3 weeks. However, gasoline stocks fell 1 million bbl to 232.3 million bbl last week, opposite analysts’ expectations of a 1 million bbl gain. That’s on top of a 1.7 million bbl decline in the week ended Jan. 18. Finished gasoline inventories increased last week while blending components decreased. Distillate fuel stocks fell 2.3 million bbl to 130.6 million bbl last week, surpassing the outlook for a 500,000 bbl decline.

The total increase in “Big Three” inventories of crude, gasoline, and distillates “was a bit smaller relative to consensus estimates,” Raymond James analysts said. “Other petroleum products increased sizably in aggregate, with a large build in unfinished oils. Refinery utilization also bounced back to 85% after three consecutive declines.”

Ground said, “Highlighting concerns over off-take from the Seaway Pipeline, Cushing, Okla., crude oil inventories rose 285,000 bbl: this was an added drag to the West Texas Intermediate price.”

Energy prices

The March contract for benchmark US sweet, light crudes increased 37¢ to $97.94/bbl Jan. 30 on the New York Mercantile Exchange. The April contract gained 39¢ to $98.38/bbl. On the US spot market, WTI at Cushing was up 37¢ to $97.94/bbl.

Heating oil for February delivery inched up 0.81¢ to $3.12/gal on NYMEX. Reformulated stock for oxygenate blending for the same month escalated 6.53¢ to $3.04/gal.

The new front-month March contract for natural gas regained 7.7¢ to $3.34/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., took back 4.7¢ to $3.24/MMbtu.

In London, the March IPE contract for North Sea Brent rose 54¢ to $114.90/bbl. Gas oil for February was up $4.50 to $990.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes advanced 91¢ to $111.43/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...
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