MARKET WATCH: Oil prices fall despite line shutdown, refinery strike
By OGJ editors
HOUSTON, Apr. 25 -- The June crude contract lost $2.24 on the New York futures market Apr. 24, settling at $116.06/bbl, despite developing news that would normally cause prices to rise.
"Despite the upcoming shutdown of the Forties pipeline system, which carries 40% of UK production, and continued Nigerian militant attacks, crude was down 2% [Apr. 24]," said J. Marshall Adkins of Raymond James & Associates Inc. in Houston. The price decline, Adkins said in a research note, "was likely due to a strengthening dollar"—up 2% over the last 3 days.
Separately, Adkins said a 2-day workers' strike set to begin Apr. 27 at Ineos PLC's Grangemouth refinery and petrochemical plant in Scotland would crimp about 210,000 b/d of refinery production as well as have a "cascading effect" on BP's 700,000 b/d Forties line.
"BP would have to shut down North Sea production 12 hr before the plant shutdown, and the refinery could be down for a week," the Raymond James analyst said, adding, "About 450,000 b/d of volumes on the Forties pipeline is exported from the UK."
Energy prices
The July NYMEX contract for benchmark US sweet, light crudes lost $2.37 to $115.22/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., reached $117.16/bbl, down $2.22 from the previous day's close.
Heating oil for May delivery closed at $3.26 on NYMEX, down about 7¢. The May contract for reformulated blend stock for oxygenate blending (RBOB) closed at $3.02/gal, down 3¢ from the previous day.
The May natural gas contract inched up 1¢ from the previous day to close at $10.79/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., gained 27¢ to settle at $10.66/MMbtu.
In London, the June IPE contract for North Sea Brent crude settled at $114.34/bbl, down $2.12. The May gas oil contract closed at $1,076.25/tonne, up $8 for the day.
The average price for the Organization of Petroleum Exporting Countries' basket of 13 reference crudes fell by 51¢ to $110.63/bbl on Apr. 24.