MARKET WATCH: Crude prices fall to lowest level this year for front-month contract

Crude prices fell sharply for the second consecutive day Feb. 21, with the front-month contract down 2.5% to the lowest level this year in the New York market following a bigger-than-expected jump in the commercial US inventory. The price of crude lost almost 5% in the Feb. 20-21 sessions.

“Yesterday was a reality check for oil bulls with the Department of Energy reporting a fifth consecutive week of crude inventory builds. US oil stockpiles are currently at a seasonal all-time high,” said analysts in the Houston office of Raymond James & Associates Inc. Fallout for energy stocks was “relatively mild” with the SIG Oil Exploration & Production Index declining 0.2% and the Oil Service Index down 1.5% after larger losses the previous session. “Broader markets fell a second straight day with US employment concerns and the Euro-zone still dominating sentiment. The Standard & Poor’s 500 Index closed down 0.6%,” they said.

DOE’s Energy Information Administration said commercial US crude inventories escalated 4.1 million bbl to 376.4 million bbl in the week ended Feb. 15, well above Wall Street’s consensus for a 2 million bbl gain. Gasoline stocks dropped 2.9 million bbl to 230.4 million bbl in the same period, outstripping analysts’ outlook for a 900,000 bbl decline. Finished gasoline inventories increased while blending components decreased. Distillate fuel stocks fell 2.3 million bbl to 123.6 million bbl, below market expectations of 1.8 million bbl loss (OGJ Online, Feb. 21, 2013).

Raymond James analysts reported, “Much of the data from the release leaned bearish. Refinery utilization edged down yet again [last] week, from 83.8% to 82.9%. Total petroleum demand continued its roller coaster ride, falling 3.3% after rising 5.5% the previous week. (That said, on a 4-week moving average basis, total petroleum demand was up 0.2% compared with last year.)” Cushing, Okla., inventories increased for the first time in 3 weeks, up 400,000 bbl to 50.7 million bbl.

Analysts at Barclays Capital Commodities Research, New York, said, “This week saw a shift in directional momentum in crude oil markets, with prices easing from 7-month highs. Natural gas prices edged slightly higher on news of a bigger-than-consensus storage withdrawal. The end-of-season storage level has very little room to move compared with our expected 1.9 tcf as winter is almost over, indicating prices should be range-bound in the near term.”

EIA reported the withdrawal of 127 bcf of natural gas from US underground storage in the week ended Feb. 15, up from Wall Street’s consensus for a 124 bcf pull. That left 2.4 tcf of working gas in storage, down 242 bcf from a year ago but 361 bcf above the 5-year average (OGJ Online, Feb. 21, 2013).

Meanwhile, European Union officials on Feb. 22 said the group’s overall economy likely will decline 0.3% this year, despite expected improvement in the second half. That’s down from an earlier prediction of 0.1% growth.

Energy prices

Energy prices were down across the board. Both the new front-month April contract and the May contract for benchmark US light, sweet crudes fell $2.38 to $92.84/bbl and $93.27/bbl, respectively Feb. 21 on the New York Mercantile Exchange. On the US spot market, West Texas Intermediate at Cushing declined $1.62 to match the April futures closing price of $92.84/bbl.

Heating oil for March delivery dropped 6.06¢ to $3.10/gal on NYMEX. Reformulated stock for oxygenate blending for the same month decreased 2.3¢ to $3.04/gal.

The March natural gas contract retreated 3.3¢ to $3.25/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., declined 2.5¢ to $3.29/MMbtu.

In London, the April IPE contract for North Sea Brent was down $2.07 to $113.53/bbl. Gas oil for March fell $14.50 to $981.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes lost $2.01 to $111.27/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

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...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

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...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...
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


OGJ's Midyear Forecast 2015

When 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

When 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



On Demand

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