MARKET WATCH: Oil futures prices relinquish December gains

Crude oil futures prices closed at about $3/bbl lower Jan. 2 on both New York and London markets, and analysts attributed the sharp price drops to robust US production coupled with the potential resumption of Libyan oil production and exports.

Ole Hansen, head of commodity strategy for Saxo Bank, said both Brent and West Texas Intermediate crude oil benchmarks ran into heavy selling this week. Saxo Bank is based in Copenhagen.

“Key to the move lower was the lack of speculative buyers who had been supporting the price in order to achieve a good end-of-year result, together with a rising dollar and not least the news from Libya,” that labor protests were ending at El Sharara oil field, allowing resumption of production.

Repsol SA operates El Sharara field. Hansen noted labor protests could resume if the Libyan government fails to meet several key demands from workers.

“The oil-rich eastern part of the country is still not showing any signs of progress towards resumption of production, and thus we continue to see Libya’s production falling far short of previous levels,” Hansen said. Before the outbreak of civil war, Libya produced 1.65 million b/d of crude oil, according to the US Energy Information Administration (OGJ Online, Oct. 27, 2011).

Separately, the US government reported a decrease in crude oil stocks. EIA released its weekly petroleum and products report Jan. 3, later than normal because of the midweek New Year’s holiday.

Commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 7 million bbl for the week ended Dec. 27 compared with the previous week, EIA reported.

At 360.6 million bbl, the crude oil inventory remained above the upper limit of the average range for this time of year, EIA said.

In its separate natural gas storage report also released Jan. 3, EIA estimated working gas at 2.974 tcf for the week ended Dec. 27, marking a net decline of 97 bcf from the previous week. Stocks were 562 bcf fewer than for the same period a year ago and 289 bcf below the 5-year average of 3.263 tcf.

Products inventory

Total US motor gasoline inventories increased by 800,000 bbl last week, EIA said, noting that level was in the upper half of the average range. Finished gasoline inventories decreased while blending components inventories increased.

Distillate fuel inventories increased by 5 million bbl last week, which was below the lower limit of the average range for this time of year. Propane-propylene inventories fell 1.5 million bbl for the week, well below the lower limit of the average range. Total commercial petroleum inventories decreased by 6.6 million bbl for the week ended Dec. 27.

US refinery inputs averaged over 16.2 million b/d for last week, which was 14,000 b/d higher than the previous week’s average. Refineries operated at 92.4% of capacity last week. Gasoline production decreased, averaging 9.1 million b/d. Distillate fuel production increased last week, averaging over 5.2 million b/d.

Crude oil imports averaged 7.5 million b/d, down by 40,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.4 million b/d, which EIA said was 7.5% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 247,000 b/d while distillate fuel imports averaged 140,000 b/d last week.

Energy prices

The New York Mercantile Exchange February crude contract dropped $2.98 on Jan. 2 to close at $95.44/bbl, marking the lowest front-month price since Dec. 2. The March contract fell $2.93 to settle at $95.62/bbl.

Heating oil for February delivery was down 7.85¢ to a rounded $2.99/gal. Reformulated gasoline stock for oxygenate blending for February delivery also dropped, down 9.1¢, to a rounded $2.70/gal.

The February natural gas contract on NYMEX rose 9.1¢ to settle at $4.32/MMbtu. On the US spot market, the gas price at Henry Hub, La., on Jan. 2 gained less than a penny to remain at a rounded $4.32/MMbtu.

In London, the February ICE contract for Brent crude oil fell $3.02 to close at $107.78/bbl. The March ICE contract for Brent was down $2.93 to settle at $107.60/bbl. The ICE gas oil contract for January was down $20.75 to settle at $923.50/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes closed at $106.92/bbl on Jan. 2, down $1.02 from the previous trading session on Dec. 31.

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

EPA suggests DOS reconsider Keystone XL climate impact conclusions

02/03/2015 The US Department of State might want to reconsider its conclusions regarding potential climate impacts from the proposed Keystone XL crude oil pip...

IHS sees second-half end of US output surge

02/03/2015

Expectations are moderating about growth of oil production in the US this year.

Anadarko reports 2014 loss, remains upbeat about Wattenberg

02/03/2015 Anadarko Petroleum Corp. announced a 2014 net loss of $1.75 billion, or $3.47/share diluted, including a net loss of $4.05 billion associated with ...

CNOOC cuts capital budget, starts production from Jinzhou 9-3

02/03/2015 CNOOC Ltd. is slashing its capital budget for 2015 by 26-35% to $11.25-12.86 billion compared with last year’s budget. Capital expenditures for exp...

Seven Group buys into Beach Energy

02/03/2015 Media group Seven Group Holdings, Perth, has bought 13.8% of Adelaide-based Beach Energy Ltd. through share purchases fuelling speculation of a pos...

Karve joins Cobalt for Cameia development

02/03/2015 Shashank V. Karve has joined Cobalt International Energy Inc. as executive vice-president in charge of development of deepwater Cameia oil field on...

MARKET WATCH: NYMEX crude oil stays positive on lower rig count

02/03/2015 Oil prices on the New York and London markets closed higher Feb. 2 on positive momentum generated by a falling US rig count, suggesting cuts in pro...

Obama’s proposed fiscal 2016 budget recycles oil tax increases

02/02/2015 US President Barack Obama has proposed his federal budget for fiscal 2016 that he said was designed to help a beleaguered middle class take advanta...

MOL absorbs Eni’s Romanian retail assets

02/02/2015

MOL Group, Budapest, has completed the acquisition of Eni Romania, including 42 service stations to be rebranded under the MOL name.

White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts


Prevention, Detection and Mitigation of pipeline leaks in the modern world

When Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 

register:WEBCAST



On Demand

Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?

register:WEBCAST


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.

register:WEBCAST


The Future of US Refining

Fri, Feb 6, 2015

Oil & Gas Journal’s Feb. 6, 2015, webcast will focus on the future of US refining as various forces this year conspire to pull the industry in different directions. Lower oil prices generally reduce feedstock costs, but they have also lowered refiners’ returns, as 2015 begins with refined products priced at lows not seen in years. If lower per-barrel crude prices dampen production of lighter crudes among shale plays, what will happen to refiners’ plans to export more barrels of lighter crudes? And as always, refiners will be affected by government regulations, particularly those that suppress demand, increase costs, or limit access to markets or supply.

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