MARKET WATCH: Oil prices continue falling; gas prices climb

Oil prices continued falling Apr. 5 with oil dropping a hefty 5% through last week on the New York market. Natural gas continued to benefit from cold weather forecasts, up 2.5% for the week.

Investors “are starting to fear that perhaps the US economy is not growing as strongly as previously thought,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. “We are not surprised to see an easing of the growth momentum that we saw in the first 2 months of the year. Our base case remains that, although an improvement on last year, the US will experience fairly tepid growth in 2013.”

In Houston, analysts with Raymond James & Associates became more bullish on gas, raising their 2013 and 2014 average price forecasts because of “colder winter-ending weather.” They now expect US gas futures to average $3.85/Mcf this year, up from their earlier prediction of $3.25/Mcf. “This is still slightly below the strip as we believe higher winter prices will encourage a reversal in the coal-to-gas switching through spring 2013,” they said. “We expect summer 2013 natural gas prices to strengthen as the market struggles to refill gas storage.”

They expect gas fundamentals to remain relatively tight “as cheap US natural gas prices encourage solid demand growth, but low-cost shale gas allows the 2014 gas price to balance the supply and demand at $4/Mcf.” That’s up from their previous prediction of $3.75/Mcf. They said, “We remain convinced that both US gas demand and US gas supply can grow profitably at a $4.25/Mcf gas price.”

Energy prices

The May contract for benchmark US light, sweet crudes dropped 56¢ to $92.70/bbl Apr. 5 on the New York Mercantile Exchange. The June contract declined 55¢ to $93.01/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down 56¢ to $92.70/bbl.

Heating oil for May delivery lost 5.38¢ to $2.91/gal on NYMEX. Reformulated stock for oxygenate blending for the same month decreased 3.51¢ to $2.86/gal.

The May natural gas contract, however, jumped 17.8¢ to $4.13/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., regained 6.8¢ to $4.02/MMbtu.

In London, the May IPE contract for North Sea Brent was down $2.22 to $104.12/bbl. Gas oil for April continued its retreat, down $8 to $880/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes fell $1.11 to $103.10/bbl. So far this year, OPEC’s basket price has averaged $109.21/bbl, down from $109.45/bbl for all of 2012.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

DOE approves LNG exports to non-FTA countries from Oregon project

03/24/2014 The US Department of Energy conditionally approved Jordan Cove Energy Project LP’s application to export LNG through its proposed terminal on Orego...

MARKET WATCH: Front-month crude oil contract closes up, gas down on week

03/24/2014

The front-month crude oil contract ended the week higher Mar. 21 while natural gas futures prices edged slightly lower.

HSC remains closed, fuel cleanup continues after barge collision

03/24/2014 The Houston Ship Channel (HSC) remained closed to unauthorized vessels Mar. 24 as the result of a temporary emergency safety zone being established...

Judge bars Anadarko e-mails as evidence in Macondo blowout hearing

03/21/2014 A federal district judge in New Orleans refused to accept e-mails between Anadarko Petroleum Corp. and BP PLC as evidence in a hearing to determine...

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