MARKET WATCH: Oil futures fall as US government shutdown threatens crude demand

Benchmark light, sweet crude oil futures prices fell Oct. 1 for a third consecutive trading session on the New York market amid rising concerns that a partial US government shutdown could reduce crude demand.

Both Democrats and Republicans were quoted in the media on Oct. 2 saying resolution of an impasse on the federal budget could take weeks. Meanwhile, White House and lawmakers planned more talks Oct. 2 in efforts to break a stalemate that closed some agencies.

House Republicans were trying to devise a piecemeal strategy of financing government operations going into December. Meanwhile, analysts suggested the budget impasses could reduce oil demand because hundreds of thousands of federal employees might go without pay for an undetermined period.

Natural gas prices on Oct. 1 reached their highest level on NYMEX since Sept. 20. The upward momentum was expected to continue as forecasters watched a system likely to enter the Gulf of Mexico. The National Hurricane Center said a low-pressure area has 40% chance of forming into a tropical cyclone. The system was expected to reach the southern gulf by Oct. 3.

The US Energy Information Administration’s weekly inventory report came out as scheduled Oct. 2 and was expected to do the same on Oct. 9 regardless of a government shutdown. Crude oil stockpiles built more than analysts had expected.

Crude inventory builds

The American Petroleum Institute said its information showed crude stockpiles increased 4.5 million bbl last week. EIA’s inventory report, meanwhile, said US commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased 5.5 million bbl for the week ended Sept. 27 compared with the previous week. At 363.7 million bbl, crude inventories are toward the upper range for this time of year.

Total motor gasoline inventories increased 3.5 million bbl and are at the top of the average range. Finished gasoline and gasoline blending component inventories both increased. Distillate fuel inventories decreased 1.7 million bbl and remain near the lower limit of the average range for this time of year. Propane-propylene inventories increased 1.6 million bbl, which is middle of the average range.

US refinery inputs averaged 15.4 million b/d for the week ended Sept. 27, which was 146,000 b/d lower than the previous week’s average. Refineries operated at 89% of capacity. Gasoline production fell, averaging 8.9 million b/d. Distillate fuel production rose to about 4.9 million b/d.

EIA said crude oil imports averaged 8.4 million b/d last week, up 438,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged just under 8 million b/d, which was down 6.5% from the same 4-week period last year.

Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 559,000 b/d. Distillate fuel imports averaged 85,000 b/d last week.

Energy prices

The NYMEX November contract for benchmark US light, sweet crudes fell 29¢ on Oct. 1, settling at $102.04/bbl. During the trading session, the November contract dipped briefly to $101.06/bbl but rebounded. The December crude contract dropped 21¢ to settle at $101.69/bbl.

Heating oil for October delivery was down 1.6¢ to a rounded $2.95/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for October lost 1.76¢ to $2.61/gal, marking its lowest settlement price for 2013.

The November natural gas contract climbed 4.9¢ to a rounded $3.61/MMbtu on NYMEX. On the US spot market, the gas price at Henry Hub, La., was $3.58/MMbtu, up 6.2¢.

In London, the November IPE contract for North Sea Brent crude dropped 43¢ to $107.94/bbl. The October contract for gas oil dropped $7.75 to $905.25/tonne.

The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes declined 19¢ to $105.42/bbl on Oct. 1.

Contact Paula Dittrick at paulad@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