MARKET WATCH: Crude posts marginal loss in fluctuating market

The front-month crude contract posted a marginal loss after fluctuating within a $2/bbl range Feb. 6 on the New York market, but natural gas increased 0.6% on forecasts of colder weather.

“An intensifying decline during the first half of the day gave way to a strong relief rally, leaving oil markets little changed from the previous day’s close,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. He credited geopolitical flare-ups in Tunisia and Syria for reversing the market’s early decline from bearish inventory reports. 

In Houston, analysts with Raymond James & Associates Inc. noted rising political concerns in Spain and Italy.

“Many have called for a resignation of Spanish Prime Minister Rajoy following allegations of a potential slush fund, while Silvio Berlusconi is becoming more competitive in the Italian prime minister race, fueling fears of renewed financial instability,” they said. “While the European uncertainty led to early losses, the broader markets bounced back to end the day flat after positive earnings.” The Oil Service Index continued its decline, down 0.4%. The SIG Oil Exploration & Production Index continued to rise, up 1%.

During early trading Feb. 7, Ground said, “We’ve seen the market take heart from the fact that Saudi Arabian crude oil production appears to have remained steady in January. The positive reaction to the news is most likely because the decline in December’s production was generally taken as a response to declining oil demand. Consequently, markets are likely reasoning that steady Saudi production in January must imply steady global demand.”

US inventories

The Energy Information Administration reported the withdrawal of 118 bcf of natural gas from US underground storage in the week ended Feb. 1, less than Wall Street’s consensus for a pull of 125 bcf. That reduced gas in storage to 2.684 tcf, down 226 bcf from the comparable period in 2012 but 351 bcf above the 5-year average.

EIA earlier said commercial US crude inventories increased 2.6 million bbl to 371.7 million bbl in the same week, slightly below Wall Street’s consensus for a 2.7 million bbl gain. Gasoline stocks climbed 1.7 million bbl to 234 million bbl in the same period, surpassing analysts’ expectations of a 900,000 bbl increase. Finished gasoline inventories decreased while blending components increased last week. Distillate fuel inventories dropped 1 million bbl to 129.6 million bbl, a steeper decline than the projected 600,000 bbl decrease (OGJ Online, Feb. 6, 2013).

“The headline increase in ‘Big Three’ inventories [crude, gasoline, and distillate fuels] was a bit larger relative to consensus estimates, partly driven by lower imports,” said Raymond James analysts. “Other petroleum products came in higher than last week, with a large build in unfinished oils for the second consecutive week. Meanwhile, refinery utilization dropped from 85% to 84.2%, and demand for total petroleum products fell 3.4%, the biggest weekly decline in 4 weeks.”

Ground was “encouraged” crude stocks at Cushing, Okla., were down by 315,000 bbl last week following a surprise increase of 284,000 bbl the previous week. “However, this did not appear to be enough to completely calm concerns over the Seaway Pipeline off-take, given the mild widening of the West Texas Intermediate-Brent spread yesterday. Noting the week-to-week slip in implied demand across crude oil, distillates, and gasoline, our overall take on the data is negative.”

Energy prices

The March and April contracts for benchmark US sweet, light crudes dipped 2¢ each to $96.62/bbl and $97.09/bbl, respectively, Feb. 6 on the New York Mercantile Exchange.

On the US spot market, WTI at Cushing also lost 2¢ to match the front-month contract’s $96.62/bbl closing.

Heating oil for March delivery slipped 0.55¢ to $3.19/gal on NYMEX. Reformulated stock for oxygenate blending for the same month inched up 0.23¢ but closed essentially unchanged at a rounded $3.04/gal.

The March natural gas contract increased 1.9¢ to $3.42/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., climbed 4¢ to $3.38/MMbtu.

In London, the March IPE contract for North Sea Brent gained 21¢ to $116.73/bbl. Gas oil for February increased $1.25 to $1,011.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes rose 42¢ to $113.10/bbl.

Contact Sam Fletcher at samf@ogjonline.com

 

Related Articles

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...

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...

Survey begins of collaboration on the UKCS

06/30/2015

Deloitte has begun a survey about collaboration in the oil and gas producing industry of the UK Continental Shelf.

MARKET WATCH: NYMEX, Brent crude oil prices slump on Greek default fears

06/30/2015 US light, sweet crude oil futures and Brent crude oil futures for August delivery each settled down by more than $1/bbl on June 29, with Brent slid...

Group suggests principles for Alberta royalty review

06/29/2015 The Canadian Association of Petroleum Producers (CAPP) has suggested that four principles guide Alberta in an oil and gas royalty review planned by...

MARKET WATCH: NYMEX crude oil for August hovers below $60/bbl

06/29/2015 US crude oil futures for August delivery settled below $60/bbl on the New York market June 26 as tensions mounted about Greece, which ordered lende...

MARKET WATCH: NYMEX crude oil for August falls below $60/bbl

06/26/2015 US crude oil futures for August delivery settled below $60/bbl on the New York market June 25, and prices continued declining in early June 26 trad...

Gas faces more competition from coal, renewables, IEA official says

06/25/2015 Natural gas faces growing competition from coal and renewable energy sources at a time when its potential demand growth is slowing down, an Interna...

MARKET WATCH: NYMEX prices drop on higher gasoline inventories

06/25/2015 US crude oil futures for August delivery dropped modestly on June 24 after analysts were surprised by a weekly increase in product inventories, esp...
White Papers

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

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
Available Webcasts

On Demand

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


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

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