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

IHS sees second-half end of US output surge

02/03/2015

Expectations are moderating about growth of oil production in the US this year.

Anadarko reports 2014 loss, remains upbeat about Wattenberg

02/03/2015 Anadarko Petroleum Corp. announced a 2014 net loss of $1.75 billion, or $3.47/share diluted, including a net loss of $4.05 billion associated with ...

CNOOC cuts capital budget, starts production from Jinzhou 9-3

02/03/2015 CNOOC Ltd. is slashing its capital budget for 2015 by 26-35% to $11.25-12.86 billion compared with last year’s budget. Capital expenditures for exp...

Seven Group buys into Beach Energy

02/03/2015 Media group Seven Group Holdings, Perth, has bought 13.8% of Adelaide-based Beach Energy Ltd. through share purchases fuelling speculation of a pos...

MARKET WATCH: NYMEX crude oil stays positive on lower rig count

02/03/2015 Oil prices on the New York and London markets closed higher Feb. 2 on positive momentum generated by a falling US rig count, suggesting cuts in pro...

Obama’s proposed fiscal 2016 budget recycles oil tax increases

02/02/2015 US President Barack Obama has proposed his federal budget for fiscal 2016 that he said was designed to help a beleaguered middle class take advanta...

Pessimism mounts over UK offshore industry

02/02/2015

Pessimism about the UK offshore oil and gas industry is gaining momentum.

Syncrude sees additional $260-400 million in possible budget cuts

02/02/2015 The estimate for capital expenditures has also been reduced to $451 million net to COS, which includes $104 million of remaining expenditures on ma...

Union strike under way at US refineries, petchem plants

02/02/2015 The United Steelworkers Union (USW) has instituted a strike at nine US refining and petrochemical production plants following a breakdown in negoti...
White Papers

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...

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
Available Webcasts

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


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

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


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