MARKET WATCH: NYMEX natural gas prices soar, oil climbs

The return of winter weather to the US East Coast sent natural gas prices upward on the New York market Jan. 21, and analysts said benchmark US light, sweet crude prices drew support from an international oil demand report describing how the US might face a crude oil production wall.

Meanwhile, the US Energy Information Administration scheduled its weekly petroleum inventory report for Jan. 23, one day later than normal because of the Martin Luther King Jr. holiday on Jan. 20.

Natural gas prices escalated as the states of New York and New Jersey each declared a weather-related state of emergency on Jan. 21. Snow and freezing temperatures hit the area for the second time in 2 weeks. Forecasters said freezing temperatures and sleet were possible for Texas by Jan. 24.

The International Energy Agency of Paris issued an Oil Market Report (OMR) Jan. 21 that revised some of its earlier numbers and supported US crude oil prices, analysts said (OGJ Online, Jan. 21, 2014).

IEA adjusted its world oil consumption for fourth-quarter 2013 to 92.1 million b/d, an increase of 135,000-b/d from the previous OMR. Robust US demand since October prompted the upward adjustment despite reduced Chinese oil demand in late 2013, IEA said.

The January OMR suggested US oil production could hit a “wall” in the future because a ban on US crude oil exports might dampen continued investment and growth in US oil production. IEA said US oil demand rose by 390,000 b/d last year.

The Organization of Petroleum Exporting Countries recently revised some of its production statistics and forecasts (OGJ Online, Jan. 16, 2014).

US crude oil analysts noted TransCanada Corp.’s Gulf Coast Line, sometimes called the southern leg of the Keystone XL pipeline system, was scheduled to begin service on Jan. 22, meaning more oil will be available for Gulf Coast refineries.

The 485-mile Gulf Coast line will move crude oil from Cushing, Okla., to Nederland, Tex. The 36-in. pipeline will have an initial capacity of 700,000 b/d with potential capacity of 830,000 b/d, said TransCanada of Calgary.

In 2012, TransCanada separated the Gulf Coast Project and Keystone XL so that Gulf Coast was not part of TransCanada’s reapplication to the US State Department for Keystone XL (OGJ Online, Feb. 27, 2012).

Energy prices

The New York Mercantile Exchange February crude contract gained 62¢ on Jan. 21, closing at $94.99/bbl, and the February contract expired. The March contract climbed 36¢ to settle at $94.97/bbl. NYMEX was closed on Jan. 20 for the US Martin Luther King Jr. holiday.

Heating oil for February delivery edged down 0.9¢ to a rounded $3.02/gal. Reformulated gasoline stock for oxygenate blending for February delivery edged up slightly more than a cent to reach a rounded $2.62/gal.

The February natural gas contract on NYMEX soared 10.5¢ to a rounded $4.43/MMbtu. On the US spot market, the gas price at Henry Hub was $4.58/MMbtu, a 17.5¢ increase.

In London, the March ICE contract for Brent crude delivery rose 38¢ to close at $106.73/bbl in Jan. 21 trading while the April contract climbed 37¢ to $106.05/bbl. The ICE gas oil contract for February was up $11.25 to $919/tonne on Jan. 21.

The Organizational of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $105.33/bbl on Jan. 21, up $1.09 from Jan. 20.

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

NEW LOUISIANA FIND MAY SIGNAL REBIRTH OF TUSCALOOSA

01/01/1990 The Tuscaloosa formation of the Upper Cretaceous is found in many areas of the Gulf Coast region.

OGJ NEWSLETTER

01/01/1990 Will oil price stability dominate the 1990s? Analyst Philip Verleger thinks so. Using a measure of market concentration the U.S. government uses t...

PROFITS SLIP FOR CANADIAN OIL INDUSTRY

01/01/1990 Net income for Canadian oil companies fell 7% in first half 1989 compared with the same period in 1988, a federal agency reports. Ottawa's Petr...

OPEC IN THE 1990S

01/01/1990 The Organization Of Petroleum Exporting Countries enters the 1990s in an optimistic mood, based mainly on forecasts from various members that risin...

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