MARKET WATCH: Oil prices inch up; gas price dips

Oil prices registered small gains Jan. 7 but enough to boost the front-month crude contract to its highest closing since September in the New York market. Natural gas was down 0.6%, however, as warm weather continued on the East Coast.

Marc Ground at Standard New York Securities Inc., the Standard Bank Group, said, “While oil prices are still enjoying some support, it is clear that the market is losing momentum” prior to the latest weekly reports on US inventories. “After a particularly strong drawdown in the previous [reports], participants are expecting a build in crude oil inventories this time. Product stocks are expected to continue their expansion,” he said. The American Petroleum Institute is scheduled to release its inventory report late today while the Energy Information Administration is to report Jan. 9.

Ground said, “There is optimism that the resumption of service of the expanded Seaway pipeline (scheduled for this week) should keep West Texas Intermediate well-supported.” The capacity of that pipeline linking the Cushing, Okla., delivery point to the Gulf Coast has been expanded to 400,000 b/d from 150,000 b/d. Its opening should reduce Cushing’s glut of crude inventory, which was up to 49.8 million bbl in the week ended Dec. 28 from 29.1 million bbl at the start of 2012.

The anticipated opening of the expanded pipeline already has affected prices for WTI, resulting in narrowing the WTI-Brent spread to around $18/bbl from $22/bbl in mid-December. “While we do feel that this pipeline will be a welcome outlet for crude flowing into Cushing, production from the north of the continent continues to grow (Dakota shale and Canadian crude) and therefore will continue to put pressure on Cushing stockpiles,” Ground said.

In other news, US natural gas production increased 300 MMcfd in October—“the most recent data point given the lag in reporting,” said analysts in the Houston office of Raymond James & Associates Inc.—on top of a gain 700 MMcfd in September. Based on the EIA gas production report issued Jan. 7, Raymond James analysts said, “Onshore volumes were flat sequentially in October, as continued growth out of the Marcellus was offset by declines in Texas, Wyoming, and Louisiana during the month. That said, onshore volumes are up 2.2 bcfd year-over-year and have increased 1.3 bcfd since June. Looking ahead, we maintain a non-consensus view that core US gas supply will grow 1.2 bcfd in 2013, driven by associated gas supply growth from oil wells, a reversal of price-related shut-ins early 2012, no Hurricane Isaac production delays, and additional Marcellus takeaway capacity coming online late 2013.”

Energy prices

The February contract for benchmark US sweet, light crudes inched up 10¢ to $93.19/bbl Jan. 7 on the New York Mercantile Exchange. The March contract advanced 12¢ to $93.63/bbl. On the US spot market, WTI at Cushing remained in step from the front-month futures contract, up 10¢ to $93.19/bbl.

Heating oil for February delivery increased 1.44¢ to $3.03/gal on NYMEX. Reformulated stock for oxygenate blending for the same month rose 1.31¢ to $2.78/gal.

The February natural gas contract declined 2.1¢ to $3.27/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, La., climbed 7¢ to $3.31/MMbtu.

In London, the February IPE contract for North Sea Brent rose 9¢ to $111.54/bbl. Gas oil for January escalated by $10 to $938.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes decreased 53¢ to $108.15/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Apache’s 2015 capital budget less than half of last year’s $8.5 billion

02/12/2015 Apache Corp., Houston, plans a capital budget of $3.6-4 billion in 2015, with $2.1-2.3 billion directed toward onshore North America and $1.5-1.7 b...

Alaska LNG project partners file resource reports with FERC

02/12/2015 A series of draft environmental and socioeconomic reports for the Alaska LNG project have been submitted to the US Federal Energy Regulatory Commis...

Total reduces budget by 10% to $23-24 billion

02/12/2015 Total SA plans to lower its organic investments to $23-24 billion in 2015 from $26.4 billion in 2014 by reducing spending in brownfield development...

MARKET WATCH: NYMEX crude prices drop back below $50/bbl

02/12/2015 The New York Mercantile Exchange March crude oil contract dropped $1.18 on Feb. 11, closing at $48.84/bbl. The April contract dropped $1.15 to $50....

US House vote sends Keystone XL approval bill to Obama’s desk

02/12/2015 The US House of Representatives voted by 270 to 152 to pass S. 1, which would deem the proposed Keystone XL crude oil pipeline approved more than 6...

Groups object to White River National Forest draft leasing decision

02/12/2015 The Western Energy Alliance, West Slope Colorado Oil & Gas Association, and Public Lands Advocacy jointly filed a formal objection to the US Fo...

Five fatalities, four missing now confirmed following FPSO explosion offshore Brazil

02/12/2015 BW Offshore now reports five fatalities—all employees of BW Offshore—and four crew members missing following the Feb. 11 explosion of the Cidade de...

TransCanada challenges EPA’s comments on Keystone XL SEIS

02/11/2015 TransCanada Corp. responded to the Feb. 2 comment letter from the US Environmental Protection Agency on the US Department of State’s final suppleme...

PNR cuts capital spending nearly in half

02/11/2015 Pioneer Natural Resources Co. (PNR), Dallas, plans to spend $1.85 billion in 2015 following a fourth quarter in which the company reported a net in...
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


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