MARKET WATCH: Oil futures escalate on TransCanada pipeline news
Crude oil futures prices shot up Oct. 2 to settle $2.06/bbl higher than the previous day on the New York market after TransCanada Corp. said the southern portion of Keystone XL pipeline was nearing completion.
The New York Mercantile Exchange front-month light, sweet crude contract settlement of $104.10/bbl marked its highest closing price since Sept. 20. Brent’s premium to the US benchmark was $5.09/bbl Oct. 2 compared with $5.90/bbl on Oct. 1. During mid-September, Brent traded about $3.50/bbl higher than the NYMEX front-month crude.
TransCanada said the Gulf Coast section of the controversial 700,000 b/d pipeline was 95% complete.
Once in-service, the expansion will allow crude to more easily reach refineries along the Gulf of Mexico coast although the in-service date is uncertain.
The US Energy Information Administration’s weekly inventory report released Oct. 2 said that Cushing crude oil inventory dropped 59,000 bbl for the week ended Sept. 27 to 32.8 million bbl, the lowest level since mid-February 2012 (OGJ Online, Oct. 2, 2013).
Inventories have been falling at the Oklahoma storage hub because new railroads and pipelines to the gulf coast help reduce a regional oil surplus.
Energy prices
The NYMEX December crude contract gained $1.95 to settle at $103.64/bbl.
Heating oil for November delivery was up 3.7¢ to a rounded $2.99/gal on NYMEX. Reformulated gasoline stock for oxygenate blending for November regained 1.8¢ to a rounded $2.63/gal.
The November natural gas contract lost 6.7¢ to a rounded $3.54/MMbtu on NYMEX. On the US spot market, the gas price at Henry Hub, La., was $3.605/MMbtu, up 2.5¢.
In London, the November IPE contract for North Sea Brent crude rose 43¢ to $109.19/bbl. The October contract for gas oil gained $17.25 to $922.50/tonne.
The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes climbed 66¢ to $106.08/bbl on Oct. 2.
Contact Paula Dittrick at [email protected].
Paula Dittrick | Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.
