MARKET WATCH: WTI ‘more vulnerable’ than Brent to price slide

Brent crude oil will be “well supported on approach of $100/bbl despite yesterday’s global growth forecast downgrade by the [International Monetary Fund],” according to analysts at Standard New York Securities Inc., the Standard Bank Group.

“However, we also believe that demand over the next 12 months could push crude oil sustainably above $110/bbl,” said Walter de Wet. He expects Brent crude to average $107/bbl in the third quarter and $106/bbl in first-quarter 2014. Meanwhile, he expects West Texas Intermediate to average $103/bbl in third quarter and drop to $100/bbl in first-quarter 2014.

“Downside risk lies in the US where the partial shutdown of the Federal government could dent [gross domestic product] growth in [third quarter],” de Wet said, adding, “Therefore, WTI may be more vulnerable than Brent to a slide in prices.”

De Wet said, “The resilience of the US consumer in spite of the country’s various fiscal hurdles bodes well, although we would warn against extrapolating the recent and abrupt pick-up in some economic indicators. Such extrapolation, to our mind, has perhaps already led to undue exuberance in the WTI market.”

Energy prices

The NYMEX November crude contract jumped 46¢ on Oct. 8, settling at $103.49/bbl. The December contract gained 48¢ to $103.31/bbl.

Heating oil for November delivery was up 2.3¢ to a rounded $3.03/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for November remained virtually unchanged at a rounded $2.63/gal.

The November natural gas contract rose 8.7¢ to a rounded $3.72/MMbtu on NYMEX. On the US spot market, the gas price at Henry Hub, La., was a rounded $3.69/MMbtu, an 11¢ gain.

In London, the November IPE contract for North Sea Brent crude added 48¢ to settle at $110.16/bbl. Both the October and November contracts for gas oil increased by $9.25 to $935.50/tonne and $935.25/tonne, respectively.

The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes gained 91¢ on Oct. 8 to $107.36/bbl.

Related Articles

Market watch: Energy futures prices rose slightly Friday

05/06/2002 Crude oil futures prices rose slightly Friday amid lingering uncertainty about a possible disruption of Middle East supplies, although tensions in ...

Gulf of Mexico oil service sector showing signs of an upturn

05/06/2002 The Gulf of Mexico oil service sector is experiencing the signs of an upturn, analysts with Simmons & Co. International, UBS Warburg LLC, and RBC D...

OTC: Industry, national agencies need to work together to make FPSOs work in the gulf

05/06/2002 Over the coming years, the oil and gas industry will have to keep an open line of communication with national agencies such as the US Coast Guard a...

Market watch: Energy futures prices fall as Iraq lifts embargo

05/07/2002 Crude oil futures prices fell Monday after Iraq announced plans to lift a self-imposed export embargo with exports expected to resume by Wednesday.

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