MARKET WATCH: Brent-WTI price spread widens

Benchmark US crude prices continued slipping Feb 8 in mixed trading on the New York market, but North Sea Brent was better supported, finishing the week with its highest closing price since May. The price spread between Brent and West Texas Intermediate widened to $23.18/bbl, the biggest gap since November.

Crude and natural gas futures “both traded down on bearish inventory data, losing 2% and 1% for the week, respectively,” said analysts in the Houston office of Raymond James & Associates Inc. “Energy stocks were mixed, with the OSX (Oil Service Index)  paring its strong year-to-date gains by 1% while the EPX (SIG Oil Exploration & Production Index) rallied by 2%.”

Marc Ground at Standard New York Securities Inc., the Standard Bank Group, reported, “An easing of geopolitical tensions at the beginning of last week saw interest in WTI fade—perhaps more aggressively, given continuing Seaway Pipeline off-take concerns.”

Later last week, however, Iranian authorities rejected an offer from Vice President Joseph R. Biden Jr. for direct talks with US officials while sanctions against Iran remain (OGJ Online, Feb. 8, 2013). Over the weekend, Iranian President Mahmoud Ahmadinejad reiterated his country will not yield to sanctions from Western powers blocking much of Iran’s oil exports.

Growing concerns over the glut of crude inventory at the Cushing, Okla., delivery point for WTI contracts “are also smothering investor enthusiasm since it has emerged that capacity of the expanded Seaway Pipeline will be limited until later this year,” Ground said.

Raymond James analysts said, “Broader markets ended the week with modest gains, extending the winning streak to 6 consecutive weeks. The Standard & Poor’s 500 Index and the Dow Jones Industrial Average continued to creep toward their all-time highs as investors balanced renewed worries about the Euro-zone with bullish economic reports from Asia.”

Meanwhile, the US trade deficit fell nearly 21% in December to its lowest level in nearly 3 years, primarily due to plunging oil imports because of the surge in US production, which in turn has reduced crude prices. Oil and gas prices were down in early trading Feb. 11 with most Asian markets closed for the Lunar New Year holiday. Trading in those markets is expected to be light through much of this week.

Energy prices

The March contract for benchmark US light, sweet crudes slipped 11¢ to $95.72/bbl Feb. 8 on the New York Mercantile Exchange. The April contract dipped 8¢ to $96.27/bbl.

On the US spot market, WTI at Cushing was down 11¢ to match the front-month futures contract closing of $95.72/bbl.

However, heating oil for March delivery continued its rise, up 3.89¢ to $3.24/gal on NYMEX. Reformulated stock for oxygenate blending for the same month escalated 5.89¢ to $3.06/gal.

The March natural gas contract declined 1.3¢ to $3.27/MMbtu on NYMEX ahead of a weekend blizzard that dumped as much as 3 ft of snow in several Northeast states. On the US spot market, gas at Henry Hub, La., fell 10.6¢, also closing at a rounded $3.27/MMbtu.

In London, the March IPE contract for North Sea Brent gained $1.66 to $118.90/bbl. Gas oil for February climbed $16.25 to $1,030.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes advanced 77¢ to $114.44/bbl. So far this year, OPEC’s basket price has averaged $110.13/bbl.

Contact Sam Fletcher at samf@ogjonline.com

 

Related Articles

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

MARKET WATCH: NYMEX crude oil price slides below $61/bbl

12/11/2014 Crude oil prices fell below $61/bbl for January delivery on the New York market Dec. 10 after the Organization of Petroleum Exporting Countries low...

MARKET WATCH: US crude oil prices rebound modestly awaiting inventory report

12/10/2014 Crude oil prices rose modestly on the New York market Dec. 9 while analysts awaited the US government weekly inventory report on crude oil and prod...

ExxonMobil forecasts 35% higher world energy demand by 2040

12/10/2014 A significantly bigger global middle class, expanded emerging economies, and 2 billion more people will contribute to 35% higher world energy deman...

MARKET WATCH: Crude oil prices briefly dip to 5-year lows

12/09/2014 Oil prices on the New York and London markets remained volatile, briefly trading around lows not seen since 2009 although prices were attempting to...

White Papers

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...

Accurate Thermo-Fluid Simulation in Real Time Environments

The crux of any task undertaken in System Level Thermo-Fluid Analysis is striking a balance between ti...

6 ways for Energy, Chemical and Oil and Gas Companies to Avert the Impending Workforce Crisis

As many as half of the skilled workers in energy, chemical and oil & gas industries are quickly he...
Sponsored by

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Available Webcasts



The Future of US Refining

When 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


Oil & Gas Journal’s Forecast & Review/Worldwide Pipeline Construction 2015

When Fri, Jan 30, 2015

The  Forecast & Review/Worldwide Pipeline Construction 2015 Webcast will address Oil & Gas Journal’s outlooks for the oil market and pipeline construction in a year of turbulence. Based on two annual special reports, the webcast will be presented by OGJ Editor Bob Tippee and OGJ Managing Editor-Technology Chris Smith.
The Forecast & Review portion of the webcast will identify forces underlying the collapse in crude oil prices and assess prospects for changes essential to recovery—all in the context of geopolitical pressures buffeting the market.

register:WEBCAST



On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

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