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Weekly Oil & Gas Highlights Library

A weekly snapshot of current market conditions

The O&G weekly updates are issued on a weekly basis, highlighting news from the previous week’s activities in the oil and gas industry. The purpose of these updates is to provide:

  • Key oil and gas price indicators for the prior seven days
  • Oil market highlights
  • Natural gas highlights
  • Information about upcoming Deloitte Oil & Gas Events

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April 17, 2014:

Crude oil:

  • Last Friday, crude futures fell during Asian trading as investors anticipated Libyan ports reopening for exports the following week. Libya’s National Oil Corporation lifted force majeure on the 110,000 bbl/d al-Hariga oil exporting port, which was returned to government control earlier in the week along with the 70,000 bbl/d Zueitina port facility. The transfer from rebel control back to government control ended a nine-month standoff over the facilities. Two exporting terminals remain under rebel control. Later in the day, oil prices fell as OPEC released its Monthly Oil Market Report in which the organization raised its forecast for non-OPEC supply growth to 1.37 MMbbl/d, up 60,000 barrels from last month’s projections. The organization also lowered its demand estimate by 100,000 barrels to 29.6 MMbbl/d in 2014. Crude futures rose later in the day as the Thomson Reuters/University of Michigan preliminary index of consumer confidence rose to 82.6, the highest level since last July. WTI crude futures rose $0.34 to close at $103.74 per barrel.
  • On Monday, crude futures rose during Asian trading as tensions mounted between pro-Russian activists and Ukrainian government forces in the eastern part of the country. Over the weekend, gunmen fired on Ukrainian government forces killing a security officer. The U.S. and Western allies claim that Russian special forces were behind the attack, but Moscow has denied involvement. Russia has called for an emergency meeting of the Security Council of the United Nations to discuss the issue. Crude futures fell later in the day as Libya prepared to load a crude cargo at ports recently returned to government control. Rebels and government officials are still negotiating the return of the Ras Lanuf and Es-Sider port facilities, which account for over 40% of Libya’s export capacity. WTI crude futures closed up $0.31 at $104.05 per barrel.
  • On Tuesday, crude futures fell in Asian trading as geopolitical tensions in Ukraine subsided. Ukrainian forces did not take military action against pro-Russian protestors who fatally shot a member of the Ukrainian security forces over the weekend. Ukraine’s acting president, Oleksandr Turchynov, said he is not opposed to holding a referendum on greater regional autonomy within the country, a move supported by Russia. The outcome of the current tensions in the country may become clearer following a meeting in Switzerland on Thursday between officials from the U.S., European Union, Russia, and Ukraine. Later in the day, WTI futures fell as the American Petroleum Institute released data showing a 7.6 MMbbl increase in total U.S. crude inventories over the past week. Traders are concerned because U.S. stockpiles of crude along the Gulf Coast are at a historic high of 202 MMbbl, as reported by the Energy Information Administration (EIA) last week. WTI crude futures closed down $0.30 at $103.75 per barrel.
  • On Wednesday, crude futures rose as China’s National Bureau of Statistics released data showing the country’s GDP rose at an annualized 7.4% in the first quarter. The rate of growth was slower than the 7.7% increase reported for the fourth quarter, but higher than analysts’ expectations. Crude also gained support as the Ukrainian military engaged in military operations to regain control of the eastern portion of the country from pro-Russian separatists. Ukrainian soldiers pushed back a group of separatists from a military air base in the region. Meanwhile, a column of armored vehicles flying the Russian flag drove through the eastern city of Slaviansk. Investors are concerned about the possibility of further sanctions against Russia, which could affect the country’s energy industry. Crude futures tumbled from intra-day highs of nearly $105 per barrel as the EIA released its weekly petroleum data. According to the report, crude stockpiles in the U.S. had risen by 10 MMbbl last week to 394.1 MMbbl, which was well above analysts’ expectations. The rise in inventories was the largest week-on-week increase in crude stocks since March 2001, increasing investor concerns that the tight oil boom in the U.S. is producing a flood of light crude that is overwhelming the processing capacity of U.S. refineries, which are primarily configured to process heavier crudes. With the opening of the southern leg of the Keystone pipeline, the Gulf Coast is awash with crude supplies — inventories grew 5.1 MMbbl last week to 207 MMbbl, another historic high. In further bearish news for crude, Gulf Coast refineries are running at just 88.8% of capacity due to seasonal maintenance. WTI crude futures closed nearly unchanged, rising $0.01 to $103.76 per barrel.
  • On Thursday, crude futures fell as talks in Switzerland over the crisis in Ukraine ended with an agreement to initiate steps to de-escalate the crisis. The U.S. and its European allies threatened to increase sanctions against Russia if it does not take steps to withdraw an estimated 40,000 Russian troops from the Ukrainian border. However, the agreement does not require Russia to move its troops, engage in direct talks with the interim government of Ukraine, or reference the annexation of Crimea. Under the agreement, the Ukrainian government will grant amnesty to pro-Russian supporters who have occupied government buildings unless they are suspected of murder or other capital crimes and the government will ensure constitutional reforms will involve outreach to all political constituencies in the country. Crude futures rose during New York trading as the U.S. Department of Labor reported that new jobless claims rose by just 2,000 last week to 304,000, which was lower than analyst estimates. Jobless claims are at their lowest levels since September 2007. Futures also received support as Federal Reserve Chair Janet Yellen stated the Fed will act to support the economic recovery. She indicated she would monitor employment and inflation data before considering changes to the federal funds rate. WTI crude futures closed up $0.54 at $104.30 per barrel.

Natural gas:

  • Last Friday, natural gas futures fell after trading largely sideways during the day. Following Thursday’s 7-cent gain driven by a small 4 Bcf injection, the market looked to warmer spring temperatures and increasing storage injections over the coming weeks to moderate prices. Revised weather forecasts from the National Weather Service (NWS) showed below-average temperatures across most of the eastern part of the country in the 6-10 day forecast. However, the 8-10 day forecast showed the area of below-average temperatures receding. Henry Hub natural gas futures closed down 3.5 cents at $4.620 per MMBtu.
  • On Monday, natural gas futures fell as private weather forecasters predicted average to above-average temperatures across most of the contiguous 48 states over the next two weeks. Expectations for higher temperatures increased speculation that this week’s injection reported by the EIA would be larger than expected. The five-year average injection for this week’s reporting period is 36 Bcf. Henry Hub natural gas futures closed down 6 cents at $4.560 per MMBtu.
  • On Tuesday, natural gas futures rose as a late-season arctic blast swept across much of the northern part of the country. The NWS data showed the area of below-average temperatures increasing in the 6-10 day forecast to cover the Great Lakes and parts of the Gulf Coast. Henry Hub natural gas futures closed up 0.7 cents at $4.567 per MMBtu.
  • On Wednesday, natural gas futures fell as private weather forecasters released estimates showing only average to above-average temperatures across the U.S. during the next week. Expectations of warmer spring temperatures are keeping gas futures in check and rising U.S. domestic gas production is expected to fill natural gas inventories to an adequate level before the beginning of next winter’s heating season. Henry Hub natural gas futures closed down 3.7 cents at $4.530 per MMBtu.
  • On Thursday, natural gas futures surged in the largest one-day gain in two months as the EIA released its weekly natural gas data, which showed a smaller-than-expected increase in natural gas inventories. According to the data, working natural gas in underground storage rose 24 Bcf to 850 Bcf, which was below analyst expectations. Some investors are growing concerned that if injections do not begin to exceed the five-year average, U.S. natural gas production — set to reach a new record of 68.45 Bcf/d in 2014 — may still not be enough to rebuild depleted inventory levels. Current estimates suggest that between 2.6 Tcf and 3.1 Tcf of gas needs to be added to storage by this November. Henry Hub natural gas futures closed up 21.1 cents at $4.741 per MMBtu.

2014 archives

April 10, 2014 issue

April 03, 2014 issue

March 27, 2014 issue

March 20, 2014 issue

March 13, 2014 issue

March 6, 2014 issue

February 27, 2014 issue

February 20, 2014 issue

February 13, 2014 issue

February 6, 2014 issue

January 30, 2014 issue

January 23, 2014 issue

January 16, 2014 issue

January 09, 2014 issue

 

2013 archives

December 19, 2013 issue

December 12, 2013 issue

December 5, 2013 issue

November 21, 2013 issue

November 14, 2013 issue

November 7, 2013 issue

October 31, 2013 issue

October 24, 2013 issue

October 17, 2013 issue

October 10, 2013 issue

October 3, 2013 issue

September 26, 2013 issue

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September 12, 2013 issue

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August 22, 2013 issue

August 15, 2013 issue

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August 1, 2013 issue

July 25, 2013 issue

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June 27, 2013 issue

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June 6, 2013 issue

May 30, 2013 issue

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April 25, 2013 issue

April 18, 2013 issue

April 11, 2013 issue

April 4, 2013 issue

March 28, 2013 issue

March 21, 2013 issue

March 7, 2013 issue

February 28, 2013 issue

February 21, 2013 issue

February 14, 2013 issue

February 7, 2013 issue

January 31, 2013 issue

January 24, 2013 issue

January 17, 2013 issue

January 10, 2013 issue

January 3, 2013 issue

2012 archives

December 20, 2012 issue

December 13, 2012 issue

December 6, 2012 issue

November 29, 2012 issue

November 15, 2012 issue

November 8, 2012 issue

November 1, 2012 issue

October 25, 2012 issue

October 18, 2012 issue

October 11, 2012 issue

October 4, 2012 issue

September 27, 2012 issue

September 20, 2012 issue

September 13, 2012 issue

September 6, 2012 issue

August 23, 2012 issue

August 16, 2012 issue

August 9, 2012 issue

August 2, 2012 issue

July 26, 2012 issue

July 19, 2012 issue

July 12, 2012 issue

July 5, 2012 issue

June 21, 2012 issue

June 14, 2012 issue

June 7, 2012 issue

May 31, 2012 issue

May 24, 2012 issue

May 17, 2012 issue

May 10, 2012 issue

May 3, 2012 issue

April 26, 2012 issue

April 19, 2012 issue

April 12, 2012 issue

April 5, 2012 issue

March 29, 2012 issue

March 22, 2012 issue

March 15, 2012 issue

March 8, 2012 issue

March 1, 2012 issue

February 23, 2012 issue

February 16, 2012 issue

February 9, 2012 issue

February 2, 2012 issue

January 26, 2012 issue

January 19, 2012 issue

January 12, 2012 issue

January 5, 2012 issue

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