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

PHMSA proposes pipeline accident notification regulations

07/02/2015 The US Pipeline and Hazardous Materials Safety Administration has proposed new federal oil and gas pipeline accident and notification regulations. ...

FourPoint Energy to acquire Anadarko basin assets from Chesapeake

07/02/2015 FourPoint Energy LLC, a privately owned Denver company, plans to acquire oil and gas assets from Chesapeake Energy Corp. subsidiaries Chesapeake Ex...

Puma Energy completes purchase of Murco’s UK refinery, terminals

07/02/2015 Singapore-based Puma Energy Group Pte. has completed its purchase of UK midstream and downstream assets from Murco Petroleum Ltd., a subsidiary of ...

BP to settle federal, state Deepwater Horizon claims for $18.7 billion

07/02/2015 BP Exploration & Production Inc. has agreed in principle to settle all federal and state claims arising from the 2010 Deepwater Horizon inciden...

MARKET WATCH: NYMEX oil prices plummet on crude inventory build, Iran deadline extension

07/02/2015 Oil prices plummeted more than $2/bbl July 1 to settle at a 2-month low on the New York market after a weekly government report showed the first ri...

API to issue recommended practice to address pipeline safety

07/01/2015 The American Petroleum Institute expects to issue a new recommended practice in another few weeks that addresses pipeline safety issues, but the tr...

Shell Midstream Partners takes interest in Poseidon oil pipeline

07/01/2015 Shell Midstream Partners LP has completed its acquisition of 36% equity interest in Poseidon Oil Pipeline Co. LLC from Equilon Enterprises LLC, a s...

MARKET WATCH: Oil prices decline as US crude inventories post first gain in 9 weeks

07/01/2015 Oil prices on July 1 surrendered much of their gains from the day before after the release of a government report showing the first rise in US crud...

FWS issues Shell letter of authorization on Chukchi Sea lease

07/01/2015 The US Fish & Wildlife Service issued Shell Gulf of Mexico Inc. a letter of authorization (LOA) related to the potential disturbance of polar b...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

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
Available Webcasts


OGJ's Midyear Forecast 2015

When Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

When Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST



On Demand

Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

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