MARKET WATCH: Oil prices waffle in indecisive markets
Oil markets continued to waffle with crude posting a marginal daily loss Jan. 25 but finishing up modestly overall for its seventh consecutive week. Natural gas prices continued to slip, however, down 3% for the week in the New York market despite colder weather in the US Northeast.
“However, there does appear to be a slowing of upward momentum in the US benchmark price,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. Growing optimism over the US and Chinese economy has extended participants’ interest in West Texas Intermediate “beyond the enthusiasm that first followed the resumption of service in the Seaway Pipeline,” he said.
In the equity market major indices rose for the fourth straight week “as earnings generally topped Street expectations and fears over fiscal gridlock in Washington subsided. Energy stocks followed the broader markets,” said analysts in the Houston office of Raymond James & Associates Inc.
Meanwhile, Raymond James analysts foresee a turbulent NGL market with prices averaging 74¢/gal in 2013 and 85¢/gal in 2014. “Producers have been taking advantage of the value uplift from NGLs; however, now with ethane and propane prices ‘pinned to the mat’ and our bearish crude price outlook, NGL prices could remain lower for longer,” they said.
Energy prices
The March contract for benchmark US light, sweet crudes slipped 7¢ to $95.88/bbl Jan. 25 on the New York Mercantile Exchange. The April contract declined 12¢ to $96.33/bbl. On the US spot market, WTI at Cushing, Okla., was down 7¢ to $95.88/bbl.
Heating oil for February delivery retreated 2.96¢ to $3.06/gal on NYMEX. Reformulated stock for oxygenate blending for the same month, however, increased 1.25¢ to $2.88/gal.
The February natural gas contract dipped 0.2¢ to $3.44/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 14.7¢ to $3.41/MMbtu.
In London, the March IPE contract for North Sea Brent was unchanged at $113.28/bbl in the Jan. 25 session but posted a weekly gain of $1.39/bbl. Gas oil for February dropped $7.50 to $968.50/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased 32¢ to $110.20/bbl. So far this year, OPEC’s basket price has averaged $108.88/bbl.
Contact Sam Fletcher at [email protected].
About the Author
Sam Fletcher
Senior Writer
I'm third-generation blue-collar oil field worker, born in the great East Texas Field and completed high school in the Permian Basin of West Texas where I spent a couple of summers hustling jugs and loading shot holes on seismic crews. My family was oil field trash back when it was an insult instead of a brag on a bumper sticker. I enlisted in the US Army in 1961-1964 looking for a way out of a life of stoop-labor in the oil patch. I didn't succeed then, but a few years later when they passed a new GI Bill for Vietnam veterans, they backdated it to cover my period of enlistment and finally gave me the means to attend college. I'd wanted a career in journalism since my junior year in high school when I was editor of the school newspaper. I financed my college education with the GI bill, parttime work, and a few scholarships and earned a bachelor's degree and later a master's degree in mass communication at Texas Tech University. I worked some years on Texas daily newspapers and even taught journalism a couple of semesters at a junior college in San Antonio before joining the metropolitan Houston Post in 1973. In 1977 I became the energy reporter for the paper, primarily because I was the only writer who'd ever broke a sweat in sight of an oil rig. I covered the oil patch through its biggest boom in the 1970s, its worst depression in the 1980s, and its subsequent rise from the ashes as the industry reinvented itself yet again. When the Post folded in 1995, I made the switch to oil industry publications. At the start of the new century, I joined the Oil & Gas Journal, long the "Bible" of the oil industry. I've been writing about the oil and gas industry's successes and setbacks for a long time, and I've loved every minute of it.