MARKET WATCH: Iraqi refinery fire likely to move oil futures

Crude oil futures hovered around $106/bbl on the New York market June 17 awaiting a weekly US government inventory report while international oil markets remained focused on instability in Iraq where militants attacked a refinery.

Iraq’s Oil Ministry officials confirmed to reporters that parts of Iraq’s largest refinery at Baiji were ablaze June 18. The fire was ignited when Sunni militants seized control of part of the refinery while fighting government troops.

The 310,000-b/d hydroskimming and hydrocracking refinery is in Salahudin province, 200 km north of Baghdad. Baiji refinery has been the scene of violence and at least one attack-related fire previously. Years ago, fighters believed to belong to al-Qaeda were suspected in an attack and fire (OGJ Online, Jan. 8, 2008).

Details were not immediately available regarding what units at the refinery were on fire. FACTS Global Energy analyst Cuneyt Kazokoglu in London told the Wall Street Journal that the Baiji refinery attack and fire had no immediate price effect in early June 18 futures trading.

Kazokoglu believes Iraqi gasoline and diesel imports likely could increase if the refinery were to be closed.

Sunni militants have moved on several northern Iraqi cities and towns recently.

US President Barack Obama has ruled out immediate air strikes by US military on Sunni militants moving toward Baghdad. Hundreds of militants representing the Islamic State of Iraq and al-Sham (ISIS) oppose the Shiite-dominated government of Iraqi Prime Minister Nour al-Maliki.

Meanwhile, Shiite militias reportedly are mobilizing in support of the Iraqi government.

Meanwhile, the US Energy Information Administration estimated commercial crude oil inventories, excluding the Strategic Petroleum Reserve, decreased by 600,000 bbl for the week ended June 13 from the previous week.

At 386.3 million bbl, US crude oil inventories are in the upper half of the average range for this time of year, EIA said in its petroleum report.

Before the report was released on June 18, analysts told WSJ that they expected the EIA would report oil inventories fell by 1.1 million bbl for the week ended June 13.

Separately, the American Petroleum Institute said its own inventory indicated an estimated 5.7-million bbl drop in US crude stocks.

Gasoline, propane supplies

Total motor gasoline inventories increased by 800,000 bbl for the week ended June 13, which EIA described as being in the upper half of the average range. Finished gasoline inventories increased while blending components inventories decreased last week.

Distillate fuel inventories increased by 400,000 bbl, and are below the lower limit of the average range for this time of year. Propane-propylene inventories rose 2 million bbl last week and are in the upper half of the average range.

Refinery inputs averaged 15.4 million b/d during the week ended June 13, which was 150,000 b/d lower than the previous week’s average. Refineries operated at 87.1% of capacity for the week ended June 13, EIA said.

Gasoline production increased last week, averaging 9.8 million b/d. Distillate fuel production decreased last week, averaging 4.7 million b/d.

Crude oil imports averaged 7.2 million b/d last week, up by 88,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged 7.3 million b/d, 6.6% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 766,000 b/d. Distillate fuel imports averaged 106,000 b/d last week and remained same as previous week.

Energy prices

The New York Mercantile Exchange July crude oil contract price dropped 54¢ on June 17 to close at $106.36/bbl. The August contract declined by 43¢ to $105.87/bbl.

The natural gas contract for July delivery rose by less than a penny to a rounded $4.71/MMbtu. On the US cash market, gas at Henry Hub, La., was $4.66/MMbtu, down 4¢.

Heating oil for July delivery was up 2¢ to a rounded $3.02/gal. Reformulated gasoline stock for oxygenate blending for July delivery gained a rounded 2¢ to a rounded $3.09/gal.

The August ICE contract for Brent crude delivery rose 51¢, closing at $113.45/bbl. The September contract climbed 57¢ to $112.82/bbl. The ICE gas oil contract for July increased $6.25 to $930.75/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for June 17 was $108.81/bbl, a 28¢ drop from June 16. OPEC’s Secretariat office is scheduled to be closed June 19.

Contact Paula Dittrick at paulad@ogjonline.com.

Related Articles

Total joins global climate initiatives

11/20/2014 Total SA, in what it describes as a consolidation of its efforts to address climate change, will support initiatives of the United Nations Global C...

IHS: ‘Tight-oil test’ under way in US amid lower oil prices

11/20/2014 The vast majority of potential US tight-oil production growth remains economical in the current crude oil price environment, according to a recent ...

Apache to sell Louisiana, Anadarko assets for $1.4 billion

11/20/2014 Houston independent Apache Corp. has agreed to sell noncore southern Louisiana and certain Anadarko basin assets in two separate deals for a combin...

AFPM: Oregon’s proposed low-carbon fuel standard unconstitutional

11/20/2014 Oregon’s proposed low-carbon fuel standards (LCFS) program is unconstitutional, the American Fuel & Petrochemical Manufacturers said in comment...

MARKET WATCH: Crude oil futures prices rangebound

11/20/2014 US light, sweet crude oil prices remained below $75/bbl Nov. 19 on the New York market, while analysts and traders focused on the upcoming meeting ...

Bids spike in Northern Alaska lease sales

11/19/2014 Alaska’s Division of Oil & Gas received 356 bids on 298 tracts in its 2014 Northern Alaska area-wide lease sales, trumping the 92 bids received...

NOIA, API studies list benefits of more federal OCS leasing

11/19/2014 Offshore oil and gas leasing in the eastern Gulf of Mexico and on the US Atlantic and Pacific coasts could create more than 838,000 American jobs a...

Freeport LNG nears construction phase

11/19/2014 Freeport LNG Expansion LP expects later this month to close on financing and begin construction on the first two trains of its natural gas liquefac...

Petrobras initiates start-up of units at Abreu e Lima refinery

11/19/2014 Petroleo Brasileiro SA (Petrobras) has received permission to commission units at its Abreu e Lima refinery (Rnest) at the port of Suape, near Reci...

White Papers

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

Increase Equipment Uptime Through Robust Enterprise Asset Management

Whether you operate in the Upstream Drilling and Exploration sector, the Midstream distribution sector...
Sponsored by

Continuous Improvement for Maintenance with Robust Reporting and Analytics

You should have real-time, anywhere access to more relevant and comprehensive data to help manage and ...
Sponsored by

Enterprise Asset Management Solution for Movable Assets in the Oil & Gas Industry

Drilling and exploration companies face several challenges in effectively managing assets both offshor...
Sponsored by

Supporting HSE Needs for Oil & Gas Through Effective Asset Management Practices

The Oil & Gas industry is constantly being challenged to find, extract and deliver cheaper an...
Sponsored by

Sesam for subsea design analysis

With the exponential growth in the subsea sector, a new set of challenges now face the industry. Mostl...
Sponsored by

Is the gas delivery system you’re looking at able to meet your power generation needs: a hydraulic engineer’s perspective

The hydraulic characteristics, and system response to demands and supplies, of natural gas pipelines a...
Sponsored by

Available Webcasts



Optimizing your asset management practices to mitigate the effects of a down market

When 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



On Demand

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