MARKET WATCH: Oil, product prices mixed pending US inventory report

Crude oil and product futures prices were mixed on the New York and London markets on July 29 as US and Europe jointly announced broader sanctions against Russian businesses in retaliation for Russia’s involvement in the ongoing unrest in Ukraine.

Analysts said that wider sanctions against Russia coupled with violence in the Middle East keeps a floor on oil prices while weak oil demand limits any substantial gain in oil prices.

Barclays Capital Inc. analysts said in a research note that broader sanctions on Russian oil and gas companies and Russian banks “will curb foreign investment, limit these companies’ access to international capital, dent Russian economic growth, and increase the likelihood of project delays and a decline in Russian oil output in 2015.”

Bayclays analysts expect oil prices will average $108/bbl in 2015, which would be a slight decline from what they forecast for 2014. Barclays forecast says the demand for crude oil from the Organization of Petroleum Exporting Countries is expected to fall, putting pressure on OPEC to cut production.

“Geopolitical tensions in Eurasia, North Africa, and the Middle East continue to support price levels even in the absence of additional disruptions to the physical supply of oil,” Barclays analysts said. They expect the Brent-West Texas Intermediate spread will narrow to $6/bbl in 2015. This forecast is roughly $4/bbl tighter than the current spread.

“Amid acute geopolitical tension, upside demand potential from India, new Middle East refining capacity, stabilized US condensate exports, strategic stockbuilding, higher smuggled crude volumes, and crude quality changes will all impact physical and perceived market balances in the remainder of 2014 and in 2015,” Barclays said.

Meanwhile, the Energy Information Administration said US commercial crude oil inventories, excluding those in the Strategic Petroleum Reserve, decreased by 3.7 million bbl for the week ended July 25 compared with the previous week.

At 367.4 million bbl, US crude oil inventories are in the upper half of the average range for this time of year, EIA said in its weekly petroleum status report. It was the fifth consecutive drop in crude inventories, and the most recent drop was bigger than analysts expected.

Before EIA’s report was released July 30, analysts told the Wall Street Journal they expected a decline of 1.8 million bbl. The American Petroleum Institute said its separate estimate indicated crude stocks fell by 4.4 million bbl last week while gasoline and distillate supplies rose.

US gasoline supplies build

Total US motor gasoline inventories increased by 400,000 bbl for the week ended July 25, which EIA called the upper half of the average range. Finished gasoline inventories decreased while blending components inventories increased.

Distillate fuel inventories increased 800,000 bbl, which is near the lower limit of the average range for this time of year, EIA said. Propane-propylene inventories rose 1.8 million bbl last week and are near the upper limit of the average range.

US refinery inputs averaged 16.6 million b/d during the week ending July 25, which was 47,000 b/d fewer than the previous week’s average. Refineries operated at 93.5% of capacity last week.

Gasoline production decreased last week, averaging over 9.3 million b/d. Distillate fuel production decreased last week, averaging over 5 million b/d.

US crude oil imports averaged over 7.7 million b/d last week, up by 337,000 b/d from the previous week. Over the last 4 weeks, crude oil imports averaged about 7.5 million b/d, which was 5% below the same 4-week period last year.

Total motor gasoline imports, including both finished gasoline and gasoline blending components, last week averaged 602,000 b/d while distillate fuel imports averaged 124,000 b/d.

Energy prices

The New York Mercantile Exchange September crude oil contract fell 70¢ on July 29, closing at $100.97/bbl. The October contract decreased 59¢ to $99.73/bbl.

The natural gas contract for August rose 6.1¢ to a rounded $3.81/MMbtu. On the US cash market, gas at Henry Hub, La., fell 7¢ to $3.75/MMbtu.

Heating oil for August delivery gained 1.88¢ to a rounded $2.91/gal. Reformulated gasoline stock for oxygenate blending for August delivery was up 2.17¢ to a rounded $2.87/gal.

The September ICE contract for Brent crude delivery climbed 15¢ to $107.72/bbl. The October contract increased 18¢ to $108.05/bbl. The ICE gas oil contract for August gained $4.75 to $894/tonne.

A price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was $105.44/bbl on July 29, up 33¢.

Contract Paula Dittrick at paulad@ogjonline.com.

Related Articles

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...

USGS: Water usage for fracturing varies widely across shale plays

07/01/2015 The volume of water required to hydraulically fracture wells varies widely across the country, according to the first national analysis and map of ...
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