MARKET WATCH: Energy prices dwindle in mixed markets

Aug. 14, 2012

Energy prices generally continued to dwindle in lackluster markets Aug. 13, with front-month crude down 0.2% in the New York market on disappointing gross domestic products reports from Greece and Japan.

Sam Fletcher

Markets improved modestly in early trading Aug. 15 on better-than-expected economic data from the US and Germany. The Department of Commerce reported US retail sales inched up 0.8% in July, the sharpest increase since February. Germany, Europe's biggest economy, registered 0.3% GDP growth in the second quarter.

However, Eurostat—Europe’s statistics agency—said overall the economies the 17 member nations of the Euro-zone and of the 27 countries in the European Union declined 0.2% in the second quarter following a flat first quarter. Most analysts agree the European financial crisis is far from over.

Meanwhile, many China-based companies that a few years ago were eager to list their stocks on Wall Street are now buying back their US-traded shares and exiting US exchanges. The Associated Press quoted a Chinese business magazine’s report a Chinese state bank provided $1 billion in loans to help companies move their foreign listings to domestic exchanges. Chinese companies complain of the cost of complying with US financial reporting requirements, low-valued shares in US exchanges they claim do not reflect the financial strength of their firms, and a conflict between the two governments over whether US regulators can oversee China-based auditors.

Energy prices

The September contract for benchmark US sweet, light crudes dipped 14¢ to $92.73/bbl Aug. 13 on the New York Mercantile Exchange. The October contract slipped 12¢ to $93.03/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down 14¢ to $92.73/bbl.

Heating oil for September delivery decreased 0.22¢ but closed essentially unchanged at a rounded $3.02/gal on NYMEX. Reformulated stock for oxygenate blending for the same month declined 1.32¢ to $2.99/gal.

The September natural gas contract dropped 4.1¢ to $2.73/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 5.3¢ to $2.78/MMbtu.

In London, the September IPE contract for North Sea Brent increased 65¢ to $113.60/bbl. The new front-month September gas oil contract gained $2.25 to $957.25/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes rose 57¢ to $109.07/bbl. OPEC’s Vienna office will be closed Aug. 15.

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.