MARKET WATCH: Oil prices continue climbing

Oil prices continued to rally when trading resumed Jan 22 after the Martin Luther King Jr. holiday in the US. The market was “emboldened by the promise of monetary stimulus in Japan and its possible attendant positive effect on other major oil consumers in the region,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group.

Ground reported, “Support for prices continues as participants grow optimistic that US politicians will pass a resolution to push the debt limit ceiling forward to May 19. The White House has also said that this resolution would be signed into law by [President Barack] Obama should it pass Congress. While this should lift markets in the short term, it would merely be a kicking of the can down the road. So whereas US fiscal uncertainty and risk would have been concentrated in the first quarter, some of this will move to second quarter.”

He noted fiscal uncertainty remains with the sequester spending cuts and budget appropriations expiry still ahead in March. “Therefore, there is still considerable potential for damage to investor and consumer confidence, and ultimately growth over the next 6 months,” Ground said.

Analysts in the Houston office of Raymond James & Associates Inc. reported, “Investors were focused on the pragmatic, with German investor confidence surging and Spanish and Italian government borrowing costs close to 12-month lows. Crude futures rose 0.7% while natural gas remained flat.”

Analysts at KBC Market Services, a division of KBC Process Technology Ltd. in Surrey, UK, said gasoline cracks in the Singapore market weakened sharply during the first 2 weeks of January, with the crack for 95 octane gasoline dropping from just above $16/bbl at the beginning of January to a low of $12/bbl on Jan. 14. “Gasoline cracks weakened on higher supplies due in part to unusual movements from the US, with more shipments scheduled to arrive in Asia from the world’s top gasoline consumer for the second straight month in January as the country struggled with excess stocks,” they said.

KBC analysts expect some support for gasoline cracks over the next couple of months due to forthcoming heavy refinery maintenance, particularly with planned turnarounds in South Korea. In addition, they said, “Taiwan’s Formosa plans to shut down a gasoline-making unit for maintenance starting in March for 3 months. However, several major refinery startups in Asia are anticipated for early 2013.” KBC expects gasoline cracks to ease to around $11.50/bbl by March.

Analysts with the PIRA Energy Group in New York expect declining US imports to adversely affect Atlantic Basin crude balances. “North American production is growing rapidly, and US offshore imports will continue to decline,” they said. They expect the price spread between West Texas Intermediate and North Sea Brent to narrow steadily in first quarter “and then more sharply midyear as Cushing, Okla., inventories are drained. US Gulf Coast light crude differentials will be choppy but will remain connected with limited discounts vs. international levels.”

They said, “Oil prices have continued to trade in a relatively tight range. Asian crude runs will decline in January, but demand declines for gasoline, gas oil, and fuel oil will outpace run declines. This suggests Asian product stocks will build.”

Energy prices

The February contract for benchmark US light, sweet crudes gained 75¢ to $96.24/bbl Jan. 22 on the New York Mercantile Exchange, its highest closing since October. The March contract rose 74¢ to $96.68/bbl. On the US spot market, WTI at Cushing was up 75¢ to $96.24/bbl.

Heating oil for February delivery increased 4.7¢ to $3.07/gal on NYMEX. Reformulated stock for oxygenate blending for the same month rose 6.15¢ to $2.83/gal.

The February natural gas contract climbed 6.4¢ to $3.56/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., escalated 7.3¢ to $3.58/MMbtu.

In London, the March IPE contract for North Sea Brent was up 71¢ to $112.42/bbl. Gas oil for February gained $5.25 to $969.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased 16¢ to $109.48/bbl. OPEC’s Vienna office will be closed Jan. 24.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

WAFWA: Aerial survey finds lesser prairie chicken population grew

07/06/2015 A recent range-wide aerial survey found the lesser prairie chicken population rose 25% from 2014 to 2015, the Western Association of Fish & Wil...

Buru awarded onshore Canning licenses

07/06/2015 Buru Energy Ltd., Perth, and Mitsubish Corp. have been granted two production licenses for Ungani oil field in the onshore Canning basin of Western...

Cenovus sells royalty business for $3.3 billion

07/06/2015 Cenovus Energy Inc., Calgary, inked an agreement to sell its wholly owned subsidiary Heritage Royalty LP to Ontario Teachers’ Pension Plan for gros...

CERI: Energy, operational efficiencies possible in Canadian oil, gas

07/06/2015 Measures can be taken by operators in the expanding resource-intensive Canadian oil and gas sector to improve both energy efficiency and operationa...

AGL Energy to scale back upstream gas operations

07/06/2015

Gas retailer AGL Energy Ltd., Sydney, says it will exit the oil business and massively scaling back its upstream gas operations.

Macondo settlement seen ‘positive’ for BP

07/06/2015 BP Exploration & Production Inc.’s recent agreement to settle federal and state claims related to the 2010 Macondo blowout and spill improves t...

Emerging producers offered guidelines for governance

07/06/2015 Like most worthy endeavors, governing oil and gas activity at the national level is easier said than done-especially where oil and gas never before...

Linn Energy, Quantum complete AcqCo deal

07/06/2015 Linn Energy LLC, affiliate LinnCo LLC, and Quantum Energy Partners have signed definitive agreements to fund the acquisition and development of oil...

MARKET WATCH: NYMEX oil prices fall on rise in US rig count

07/06/2015 US light, sweet crude oil prices edged down going into the July 4 holiday weekend on the New York market after Baker Hughes Inc. reported July 2 th...
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


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


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


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