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

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

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
Available Webcasts


Operating a Sustainable Oil & Gas Supply Chain in North America

When Wed, Oct 7, 2015

Short lead times and unpredictable conditions in the Oil & Gas industry can create costly challenges in supply chains. By implementing a LEAN culture of continuous improvement you can eliminate waste, increase productivity and gain end-to-end visibility leading to a sustainable and well-oiled supply chain.

Please join us for this webcast sponsored by Ryder System, Inc.

register:WEBCAST


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

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