Crude oil benchmarks gained modestly on Nov. 14 after having settled down by more than $4/bbl on markets in New York and London the previous day while US natural gas futures rose sharply for a second consecutive day.
Natural gas jumped by 74¢ to close at a rounded $4.84/MMbtu on Nov. 14—the largest gain in US dollar terms since Jan. 30, 2007. The gas rally started on Nov. 13 when prices jumped more than 30¢/MMbtu.
The Nov. 14 settlement took gas futures to the highest settlement since Feb. 26, 2014.
Gas futures jumped 18% on the New York market Nov. 14, which Dow Jones Market Data reported as being the highest one-day percentage gain since Sept. 29, 2004.
Analysts said gas prices surged because levels of US gas stored underground across the Lower 48 is at a 15-year low. They also attributed cold temperatures across much of the US for the sharp price increase.
The US Energy Information Administration was scheduled to release its Weekly Gas Storage Report Nov. 15 for gas storage for the week ended Nov. 9.
EIA’s Weekly Petroleum Status Report also was scheduled for release on Nov. 15, a day later than normal because US government offices were closed Nov. 12 for Veterans Day.
Regarding crude oil prices, Moty Kuperberg, director of Oil & Gas Dynamic Shipping in Haifa, Israel, said no fundamental reason existed to have driven Brent crude to $75/bbl and higher earlier this year.
“The forces that pushed oil prices up to the $80/bbl level…were responsible for a chaotic market,” he told OGJ in an e-mail. “Just as there was no scenario and real reason for oil prices to jump more than $1-2/day, there is no cause or reason for oil to drop more than $1-2/day,” Kuperberg said.
On Nov. 13, benchmark crude prices dropped by $4/bbl on US and London markets, which he called “nonrealistic trading cycles.” Kuperberg expects Brent’s average price during 2018-20 will cap at $75/bbl. He leads the Independent Energy Security Agency, which monitors world oil prices.
Energy prices
The December light, sweet crude contract on the New York Mercantile Exchange added 56¢ to $56.25/bbl. The January contract gained 60¢ to settle at $56.44/bbl.
Ultralow-sulfur diesel for December increased 3¢ to $2.09/gal. The NYMEX reformulated gasoline blendstock for December rose nearly 2¢ to a rounded $1.56/gal.
Brent crude oil for January increased 65¢ to $66.12/bbl on London’s International Commodity Exchange. The February contract was up 65¢ to $66.47/bbl. The gas oil contract for December was $644.50/tonne, up $5.50.
The Organization of Petroleum Exporting Countries’ basket of crudes for Nov. 14 averaged $64.51/bbl, down $2.50.
Contact Paula Dittrick at [email protected].
