This site uses cookies to provide you with a more responsive and personalized service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.

Bookmark Email Print this page

Weekly Oil & Gas Market Highlights: January 16, 2014

Deloitte Center for Energy Solutions publication

Subscribe to the weekly Oil & Gas Market Highlights Memo Sign up to receive the weekly Oil & Gas Market Highlights Memo

Key Oil & Gas price indicators

Front Month Futures January 16,
January 09,
% Change
Oil – WTI
(USD per barrel)
$93.96 $91.66 2.5%
Oil – Western Canadian Select*
(USD per barrel)
$75.76 $72.06 5.1%
Oil – Brent
(USD per barrel)
$107.09 $106.39 0.7%
Natural Gas – U.S. Henry Hub
(USD per MMBtu)
$4.38 $4.01 9.4%

Data sources: Bloomberg; CME Group
* Western Canadian Select (WCS) is a blend of Canadian heavy conventional and bitumen crude oils blended with sweet synthetic and condensate oils traded in Hardisty, Canada.

Crude oil prices

WTI crude futures rose 2.5% this week, largely boosted by positive U.S. inventory data. Signs of economic recovery in the U.S. also supported the prices, while easing political tensions in Libya and Iran limited the upside.

Daily closing price
Note: Intra-day prices (every 6 hours)
Data source: Bloomberg

  1. Last Friday, crude futures rose during Asian trading as China’s General Administration of Customs reported crude imports reached a new record high of 6.33 MMbbl/d in December. However, some investors noted China’s overall crude imports were up just 4% in 2013, which was less than the 6.8% increase in 2012. During New York trading, the Department of Labor reported the U.S added 74,000 new jobs last month, which was well below analyst expectations. However, crude futures rose on the news, as investors speculated poor employment figures could lead to a slowdown in the tapering of the Federal Reserve’s bond-buying program. WTI crude futures rose $1.06 per barrel to close at $92.72 on the NYMEX.
  2. On Monday, crude futures fell as Iran reached an interim agreement over the weekend with China, France, Germany, Russia, the U.K., and the U.S. to allow thorough inspections of the country’s nuclear program. Iran will receive $550 million of the currently impounded overseas funds of $4.2 billion in return for Iran diluting a stockpile of 20% enriched uranium to just 5% enriched uranium. The agreement outlines a timetable of 6–12 months to reach a final deal. WTI fell 1% on news of the agreement, which, if successful, has the potential to return Iran crude supplies to world markets. WTI crude futures fell $0.92 cents to close at $91.80 per barrel on the NYMEX.
  3. On Tuesday, crude futures fell marginally as mediators in Libya announced they were helping to resolve the standoff between the government and protestors. Recently, militia forces stormed the Libyan parliament in an attempt to force a vote of no confidence against Libyan Prime Minister Ali Zeidan. Ongoing labor protests have kept the bulk of Libya's oil exports off world markets. During New York trading, crude futures rose, erasing earlier losses as the Department of Commerce reported retail sales rose 0.2% in December, which was above analyst expectations. The figures were stronger, up 0.7% if auto sales are excluded. Investors viewed this as a bullish sign for crude demand in the world's largest oil market. WTI crude futures rose $0.79 to close at $92.59 per barrel.
  4. On Wednesday, crude futures softened in early trading as the Libyan government reported oil exports from the country rose to 0.65 MMbbl/d. Talks with protestors have enabled production to resume at several keys fields, including the Sharara field, the second largest in the country. Crude futures rose sharply during New York trading as the Energy Information Administration (EIA) released bullish data in its weekly petroleum stocks report. The EIA reported crude inventories fell 7.66 MMbbl to 350.2 MMbbl, the lowest level since March 2012, even as U.S. crude production rose by 14,000 bbl/d to 8.16 MMbbl/d — the highest level of production since 1988. Imports of crude fell 13%, by 1.07 MMbbl/d to 6.89 MMbbl/d, which is only the second time in 14 years that U.S. crude imports were below 7 MMbbl/d. In the petroleum products market, distillate demand rose 23% to 3.72 MMbbl/d. WTI crude futures rose $1.58 to close at $94.17 per barrel.
  5. On Thursday, crude futures fell as protestors at the Sharara oil field in Libya withdrew after the government responded positively to their demands. Libya's oil production has risen to over 0.60 MMbbl/d after falling to a low of around 0.21 MMbbl/d in December. Later in the day, crude futures rose as OPEC reported its crude production fell by 20,000 bbl/d in December to 29.44 MMbbl/d, the lowest level since May 2011. OPEC estimates demand for its production will average 29.58 MMbbl/d in 2014. OPEC also sees global economic growth accelerating from 2.9% in 2013 to 3.5% in 2014, which is bullish for crude demand. During New York trading, crude futures traded sideways as the Department of Labor reported new jobless claims fell by 2,000 last week to 326,000 new claims. The Federal Reserve is closely monitoring labor market indicators to calibrate the tapering of its $75 billion-per-month bond-buying program, which has helped boost prices for commodities such as crude. WTI crude futures closed at $93.96 per barrel, down $0.21.

Natural gas prices

Henry Hub natural gas futures rose over 9% this week largely due to the 287 Bcf decline in natural gas inventories, which was driven by the impact of polar vortex in the United States. Continuing expectations of below-average temperatures across most part of the country also supported the prices.

Daily closing price
Note: Intra-day prices (every 6 hours)
Data source: Bloomberg

  1. Last Friday, natural gas futures rose slightly, driven by technical buying after Thursday’s 21.1% fall in prices due to bearish data from the EIA. Technical traders noted natural gas futures were in oversold territory for the first time since August, which helped drive investor buying. Nuclear outages continued to provide little support. Current outages of 3,000 MW compared bearishly with 8,100 MW a year ago and the five-year average outage of 5,800 MW. Henry Hub natural gas futures closed at $4.053 per MMBtu, up 4.8 cents.
  2. On Monday, natural gas futures rose 5.5% — the largest one-day gain in 16 months — driven by speculation that last week’s polar vortex, which resulted in arctic temperatures across the Midwest and eastern part of the country, may lead to a record drawing on natural gas inventories in EIA’s inventory data later this week. Henry Hub natural gas futures closed at $4.274 per MMBtu, up 22.1 cents.
  3. On Tuesday, natural gas futures extended Monday’s gains as private forecasters released revised data showing a return to below-average temperatures across the eastern part of the country in the last weeks of January. The rise was also driven by expectations of high usage in this week’s inventory report, driven by subzero temperatures across much of the country. January 7 posted the lowest temperatures of the 21st century for the lower 48 states. Henry Hub natural gas futures rose 9.5 cents to close at $4.369 per MMBtu.
  4. On Wednesday, natural gas futures fell as revised weather forecasts from the National Weather Service (NWS) showed only average temperatures across the Northeast and much of the central and eastern portions of the country in the 6–10 day forecast. Although the NWS shows below-average temperatures in the 8–14 day forecast, concerns about near-term mild temperatures drove futures trading during the day. Henry Hub natural gas futures fell 4.4 cents to close at $4.325 per MMBtu.
  5. On Thursday, natural gas futures rose as the EIA released its weekly natural gas data, which showed a 287 Bcf decline — the largest weekly decline since 1994 — in natural gas inventories, to 2,530 Bcf. The decline was well above last year's figure of 156 Bcf and the five-year average draw of 159 bcf. Natural gas futures also received support as private weather forecasters predicted colder temperatures for the rest of the week, which is expected to increase natural gas use. Henry Hub natural gas futures closed for the day at $4.382 per MMBtu, up 5.7 cents.

Futures curve

The forward curve for WTI crude is in backwardation, with September 2014 WTI futures 4% lower than near-month (February) futures. Rising North American crude supplies are expected to contribute to pipeline bottlenecks at Cushing despite the start of the Gulf Coast pipeline in early 2014. While the seasonal demand surge drove near-term (February) natural gas prices higher, the expectation of growing supply in 2014 weighed on September futures.

Data source: Factset

Weekly U.S. crude oil and natural gas data

Crude oil
Indicators This Period Prior Period % Change
Refinery Inputs (MMBPD) 15.73 16.13 -2.48%
Gasoline Demand (MMBPD) 8.02 8.27 -3.02%
Distillate Demand (MMBPD) 3.73 3.02 23.51%
Production (MMBPD) 8.16 8.15 0.12%
Imports (MMBPD) 6.89 7.96 -13.44%
Stocks (million barrels) 350.2 357.9 -2.15%
Rotary Rig Count 1,393 1,378 1.09%
Natural gas
Indicators This Period Prior Period % Change
Working Storage (Bcf) 2,530 2,817 -10.19%
Rotary Rig Count 357 372 -4.03%
Horizontal Rig Count 1,158 1,148 0.87%
Consumption (Bcf)* 1,860 (Oct 13) 1,756 (Sep 13) 5.92%
Gross Withdrawals (Bcf)* 2,574 (Oct 13) 2,466 (Sep 13) 4.40%
Canadian Imports (Bcf)* 203.3 (Oct 13) 228 (Sep 13) -10.83%
LNG Imports (Bcf)* 5.6 (Oct 13) 16.9 (Sep 13) -66.86%

* The EIA does not provide weekly natural gas consumption, withdrawal and import numbers. Thus, the latest available monthly numbers are reported above.
Data source: U.S. Energy Information Administration (EIA)

Comments and questions welcomed. Please contact

New reports from the Deloitte Center for Energy Solutions

The U.S. oil and gas industry is experiencing unprecedented success. But this success brings numerous challenges that will need to be addressed in the short term. To help better understand the way forward, the Deloitte Center for Energy Solutions has produced three distinct reports exploring some of the more critical issues facing the industry – people, infrastructure, and capital projects.

The challenge of renaissance: Managing an unprecedented wave of oil and gas investment reveals the insights of Deloitte Capital Projects specialists on the variety and magnitude of oil and gas megaproject investments and addresses associated challenges and opportunities.

Oil and gas talent management powered by analytics: Adopting analytics to effectively manage workforce needs explores how leading HR organizations within the oil and gas industry are starting to effectively use data analytics to help identify, recruit, retain and develop skilled talent.

The rise of the midstream: Shale reinvigorates midstream growth provides insights on the midstream sector’s path from growth boom to maturity over the next two decades, ultimately leading to the rise of the midstream major.

Alternative Energy Trends: Identifying Opportunities, Meeting Challenges, Delivering Solutions Report provides a view of the top ten trends in alternative energy, including weakened electricity demand, uncertainty on the federal front, enhanced competitiveness due to ongoing innovation, among others.

Take a deep dive into the summary of the 2013 Deloitte Energy Conference – Innovation: Changing the Future of Energy and gain an in-depth view of how innovative thinking is making a difference in addressing the challenges and opportunities in today’s global and domestic energy markets.

Oil & Gas Mergers and Acquisitions Report – Midyear 2013: A subdued deal market follows brisk end-of-year activity, by sector, addresses the drop in M&A activity in the first half of 2013.

2013 Oil & Gas Reality Check explores the industry fundamentals of each trend – the supply, demand, macroeconomic, regulatory, cost, price and competitive behavior factors. The paper provides insights and describes what may unfold over the short and the long term.

Exporting the American Renaissance: Global impacts of LNG exports from the United States describes an objective, economic-based analysis of the potential impact of LNG exports from the United States on domestic and global markets. This study analyzes the potential economic consequences of those exports on global markets.

Energy Independence and Security: A Reality Check, discusses the realities of U.S. energy independence and energy security — and whether these are realistic and achievable goals. 

Save the Date!

May 13–14, 2014
Deloitte Energy Conference — Washington, DC
For more information or to obtain a synopsis of the 2013 Deloitte Energy Conference, please contact

November 18, 2014
Deloitte Oil & Gas Conference — Houston, TX
For more information, please contact

About the Deloitte Center for Energy Solutions
The Deloitte Center for Energy Solutions provides a forum for innovation, thought leadership, groundbreaking research and industry collaboration to help companies solve the most complex energy challenges.

Through the Center, Deloitte’s Energy & Resources Group leads the debate on critical topics on the minds of executives—from the impact of legislative and regulatory policy, to operational efficiency, to sustainable and profitable growth. We provide comprehensive solutions through a global network of specialists and thought leaders.

With locations in Houston and Washington, D.C., the Deloitte Center for Energy Solutions offers interaction through seminars, roundtables and other forms of engagement, where established and growing companies can come together to learn, discuss and debate.

As used in this document, ‘Deloitte’ means Deloitte LLP (and its subsidiaries). Please see for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.

Share this page

Email this Send to LinkedIn Send to Facebook Tweet this More sharing options

Stay connected