MARKET WATCH: Oil prices continue climbing as gas price drops

Oil prices continued rising with the front-month crude contract up 0.9% in the New York futures market May 16 despite a report from the US Department of Labor showing a rise in claims for unemployment benefits, stimulating worries about economic recovery.

The front-month natural gas contract, however, was “beaten down by a negative storage report and lost 3.4%,” said analysts in the Houston office of Raymond James & Associates Inc.

The Standard & Poor’s 500 Index was down 0.5%, closely followed by the SIG Oil Exploration & Production Index and the Oil Service Index, down 0.9% and 0.1%, respectively.

Barclays Capital Commodities Research analysts expect North Sea Brent “to continue hovering around the relatively weak $100/bbl range due to short-term lack of upward catalysts.” They said, “Retracement is now in sight, however, as tail end of the second quarter approaches. Gas prices regained the $4/MMbtu level early this week but came under pressure again…after the bearish storage injection.”

They also reported, “Exports of US gas to Mexico have doubled in the past 3 years. Continued growth of Mexican gas demand, coupled with a wave of pipeline capacity expansions, promises to siphon increasing amounts of gas from the US.”

US inventories

The Energy Information Administration reported the injection of 99 bcf of natural gas into US underground storage in the week ended May 10, exceeding Wall Street’s consensus for 94 bcf input. That increased working gas in storage to 1.964 tcf, down 694 bcf from the comparable period a year ago and 83 bcf below the 5-year average (OGJ Online, May 16, 2013).

With the storage deficit decreasing to 694 bcf for the year, gas prices have fallen from the highs of mid-April. “Some believe that prices are set to fall even further; however, in order to refill storage inventories to the 3.8-3.9 tcf level, we need the market to run 4 bcfd looser through the summer,” Raymond James analysts said. “While [the latest] number implies that the market was 5.7 bcfd looser, we fully expect that prices need to sustain the $4/Mcf level to spur enough gas to coal switching and fill up storage inventories.”

Energy prices

The June contract for benchmark US light, sweet crudes gained 86¢ to $95.16/bbl May 16 on the New York Mercantile Exchange. The July contract climbed 89¢ to $95.45/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 86¢ to $95.16/bbl.

Heating oil for June delivery increased 2.86¢ to $2.91/gal on NYMEX. Reformulated stock for oxygenate blending for the same month advanced 1.52¢ to $2.88/gal.

However, the June natural gas contract fell 13.8¢ to $3.93/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., was unchanged at $4.01/MMbtu.

In London, the June IPE contract for Brent was up 12¢ to $103.80/bbl. Gas oil for June jumped $25 to $871.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes gained $1.19 to $100.85/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

EPA approves Magellan’s Corpus Christi splitter project

12/12/2014 The US Environmental Protection Agency has issued a final greenhouse gas prevention of significant deterioration construction permit to Magellan Pr...

Keyera to take majority interest in Alberta gas plant

12/12/2014 Keyera Corp., Calgary, will pay $65 million (Can.) to buy a 70.79% ownership interest in the Ricinus deep-cut gas plant in west-central Alberta.

PBF Energy, PBF Logistics make management changes

12/12/2014 Matthew Lucey, currently executive vice-president of PBF Energy Inc., will succeed Michael Gayda as the company’s president. Todd O’Malley, current...

TAEP: TPI still peaking, but ‘contraction unavoidable’ as oil prices fall

12/12/2014 The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Ene...

MARKET WATCH: NYMEX crude oil price extends slump

12/12/2014 Crude oil prices extended their slump on the New York market with a Dec. 11 settlement of less than $60/bbl for January, and prices continued downw...

US needs more data before ending crude export ban, House panel told

12/11/2014 Much more environmental impact information is needed before the US can reasonably remove crude oil export limits, a witness told a House Energy and...

BOEM raises offshore oil spill liability limit to $134 million

12/11/2014 The US Bureau of Ocean Energy Management increased the liability limit for oil-spill related damages from offshore operations to $134 million from ...

Rosneft, Essar sign terms of oil supply agreement

12/11/2014 OAO Rosneft and Essar Energy PLC have signed key terms of an oil supply agreement in New Delhi. Rosneft said shipments to India may begin in 2015.

Barton introduces bill to remove US crude export limits

12/11/2014

US Rep. Joe Barton (R-Tex.) introduced legislation that would remove US crude oil export limits that have been in place for nearly 40 years.

White Papers

AVEVA NET Accesses and Manages the Digital Asset

Global demand for new process plants, power plants and infrastructure is increasing steadily with the ...
Sponsored by

AVEVA’s Approach for the Digital Asset

To meet the requirements for leaner project execution and more efficient operations while transferring...
Sponsored by

Diversification - the technology aspects

In tough times, businesses seek to diversify into adjacent markets or to apply their skills and resour...
Sponsored by

Engineering & Design for Lean Construction

Modern marketing rhetoric claims that, in order to cut out expensive costs and reduce risks during the...
Sponsored by

Object Lessons - Why control of engineering design at the object level is essential for efficient project execution

Whatever the task, there is usually only one way to do it right and many more to do it wrong. In the c...
Sponsored by

Plant Design for Lean Construction - at your fingertips

One area which can provide improvements to the adoption of Lean principles is the application of mobil...
Sponsored by

How to Keep Your Mud System Vibrator Hose from Getting Hammered to Death

To prevent the vibrating hoses on your oilfield mud circulation systems from failing, you must examine...
Sponsored by

Duty of Care

Good corporate social responsibility means implementing effective workplace health and safety measures...
Sponsored by

Available Webcasts


On Demand

Optimizing your asset management practices to mitigate the effects of a down market

Thu, Dec 11, 2014

The oil and gas market is in constant flux, and as the price of BOE (Barrel of Oil Equivalent) goes down it is increasingly important to optimize your asset management strategy to stay afloat.  Attend this webinar to learn how developing a solid asset management plan can help your company mitigate costs in any market.

register:WEBCAST


Parylene Conformal Coatings for the Oil & Gas Industry

Thu, Nov 20, 2014

In this concise 30-minute webinar, participants have an opportunity to learn more about how Parylene coatings are applied, their features, and the value they add to devices and components.

register:WEBCAST


Utilizing Predictive Analytics to Optimize Productivity in Oil & Gas Operations

Tue, Nov 18, 2014

Join IBM on Tuesday, November 18 @ 1pm CST to explore how Predictive Analytics can help your organization maximize productivity, operational performance & associated processes to drive enterprise wide productivity and profitability.

register:WEBCAST


US HYDROCARBON EXPORTS Part 3 — LNG

Fri, Nov 14, 2014

US LNG Exports, the third in a trilogy of webcasts focusing on the broad topic of US Hydrocarbon Exports.

A discussion of the problems and potential for the export of US-produced liquefied natural gas.

These and other topics will be discussed, with the latest thoughts on U.S. LNG export policy.

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