MARKET WATCH: Crude down 3% last week in NY futures market

Oil prices continued falling Mar. 1 with crude down 3% for the week in the New York market, erasing all previous gains in 2013. Natural gas price was down for the day but up 4% last week on an Energy Information Administration report of a sharp drop in US gas production in December.

“As expected, with the automatic spending cuts [under US Congressional sequestration rules] finally kicking in [at midnight Mar. 1] and weaker economic data coming out of China, broader market futures are down this morning,” said analysts in the Houston office of Raymond James & Associates Inc. In early trading Mar. 4, gas was in the red while crude prices were marginally higher.

“An apparently more hawkish Federal Open Market Committee [the policy-making arm of the Federal Reserve Bank] and the seemingly more conciliatory tone taken by all parties in last week’s negotiations surrounding the Iran nuclear enrichment program kept oil markets under selling pressure,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group.

Net speculative length in benchmark crude contracts on the New York market fell for a second consecutive week. “The last time this happened was in mid-November,” Ground reported. “Disconcertingly, participants appeared to be positioning for more downside, with a 13.5 million bbl increase in speculative shorts (the largest increase since mid-December). Speculative longs fell 10 million bbl—the strongest liquidation of longs since the week ended Aug. 25.”

The potential for lower prices “is compressed but not completely absent.” Ground said, “Uncertainty surrounding the effect of the sequester on the US economy and the question marks over the extent of China’s growth going forward could keep the door to further weakness ajar.”

In other news, the US Department of State’s long-awaited supplemental environmental impact statement for the revised route of the Keystone XL pipeline's politically sensitive cross-border segment didn’t indicate any major environmental concerns (OGJ Online, Mar. 1, 2013). Instead, it acknowledged Canadian oil sands development will proceed even if the pipeline is not built. With the release of its draft SEIS, DOS has scheduled a 45-day comment period before presenting the project for presidential review. “The White House is unlikely to make a decision until the summer at the earliest, but the positive tone of the EIS will certainly raise pressure on the administration to provide approval,” Raymond James analysts said.

Energy prices

The April contract for benchmark US light, sweet crudes fell $1.37 to $90.68/bbl Mar. 1 on the New York Mercantile Exchange. The May contract dropped $1.32 to $91.14/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down $1.37 to $90.68/bbl in step with the front-month futures contract.

Heating oil for April delivery lost 3.02¢ to $2.93/gal on NYMEX. Reformulated stock for oxygenate blending for the same month, however, increased 1.69¢ to $3.13/gal.

The April natural gas contract declined 3¢ to $3.46/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., inched up 0.6¢ but closed essentially unchanged at a rounded $3.54/MMbtu.

In London, the April IPE contract for North Sea Brent lost 98¢ to $110.40/bbl. Gas oil for March fell $17.75 to $920.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes continued to retreat, down $1.83 to $106.79/bbl. So far this year, the OPEC basket price has averaged $110.84/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Statoil reduces capital budget by $2 billion following 4Q losses

02/06/2015 Statoil ASA has reduced its organic capital expenditure to $18 billion in 2015 from $20 billion in 2014. The move comes on the heels of a fourth qu...

Chinese regulators approve Sinopec’s plan for grassroots refinery

02/06/2015 China’s National Development and Reform Commission (NDRC) has approved Sinopec Beijing Yanshan Petrochemical Co. Ltd., a subsidiary of China Nation...

BOEM schedules public meetings about draft proposed 5-year OCS plan

02/06/2015 The US Bureau of Ocean Energy Management will hold the first of 20 public meetings in Washington on Feb. 9 to receive public comments on potential ...

Union strike ongoing at US refineries as negotiations continue

02/06/2015 A strike by union workers at nine US refining and petrochemical production plants remains under way as the United Steelworkers Union (USW) continue...

NCOC lets $1.8-billion pipeline contract for Kashagan field

02/06/2015 North Caspian Operating Co. (NCOC) has let a $1.8-billion engineering and construction contract to ERSAI Caspian Contractor LLC, a subsidiary of Sa...

AOPL releases 2015 safety performance and strategic planning report

02/06/2015 The Association of Oil Pipe Lines is committed to further improvements despite a 99.99% safe petroleum liquids delivery rate, AOPL Pres. and Chief ...

MARKET WATCH: NYMEX oil price bounces back up somewhat

02/06/2015 Crude oil prices on the New York market bounced up $2/bbl to settle slightly above $50/bbl Feb. 5. The positive momentum continued during early Jan...

Congressional Republicans renew bid to halt sue-and-settle maneuvers

02/05/2015 Calling it an affront to regulatory accountability that results in unchecked compliance burdens, US Sen. Charles E. Grassley (R-Iowa) and US Rep. D...

Oil-price collapse may aggravate producing nations’ other problems

02/05/2015 The recent global crude-oil price plunge could be aggravating underlying problems in Mexico, Colombia, and other Western Hemisphere producing natio...
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


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