Weekly Energy Perspective

Nov. 16, 2009 | View PDF (134 KB) | PDF Archives

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Summary

Natural Gas:

The NYMEX prompt-month contract decreased $0.20 per million British thermal units (MMBtu) last week to $4.39/MMBtu on Friday. The 12-month NYMEX strip price was down $0.15/MMBtu to $5.08/MMBtu. Last week, the Henry Hub cash price decreased $1.44/MMBtu to $2.51/MMBtu. Downward pressure remains on the gas market due to continued mild weather and record inventory levels.

As of Nov. 12 approximately 2.7 percent of natural gas production (186 MMcfd) and approximately 2.2 percent of the oil production – 29,000 barrels per day (Bpd) – in the Gulf of Mexico was shut-in due to Hurricane Ida according to the U.S. Minerals Management Service (MMS). A total of 28 percent of the Gulf of Mexico’s natural gas production –2 billion cubic feet per day (Bcfd) – was shut-in on Monday.

Storage:

The Energy Information Administration (EIA) storage inventory for the week ending Nov. 6 rose by 25 billion cubic feet (Bcf) to a record 3.813 trillion cubic feet (Tcf). The build was within expectations. The storage level is 409 Bcf above the five-year average and 350 Bcf more than the same period in 2008. This week’s total storage number continues the seven-week trend of reaching a new record storage level.

Weather:

This week, most of the U.S. should have warmer-than-normal temperatures. Most of the U.S. east of the Rockies should have warmer-than-normal temperatures and the U.S. west of the Rockies should have normal to colder-than-normal temperatures in the six- to 10-day period. However during the eight- to 14-day time period, the Midwest and Southeast will have normal temperatures while the Upper Midwest and New England regions will stay warmer than normal. 

Imports:

Send-out volumes last week from liquefied natural gas (LNG) terminals totaled about 1.5 Bcfd, which was 0.9 Bcfd more than a year ago. Canadian imports were 6.1 Bcfd, which was 1.6 Bcfd less than a year ago.

Exploration and production: 

The total U.S. oil and gas rig count increased by 23 last week to 1,101 rigs. The gas rig count decreased by six and stands at 728. The total rig count has increased by 225 rigs since the low of 876 on June 12. The Canadian rig count increased by 30 to 263.

Electricity:

Electricity generation for the week ending Nov. 7 was 1.4 percent greater than the prior week and 0.2 percent more than a year ago. Year-to-date electricity usage is 3.8 percent lower than last year.

Petroleum:

The NYMEX West Texas Intermediate (WTI) prompt-month contract settled at $76.35 per barrel (Bbl) on Friday, down $1.08/Bbl for the week. The contract traded as high as $80.45/Bbl last week but fell at the end of the week on high crude oil inventories. The spread between the prompt-month contract and the 12th-month contract continued to widen week-over-week from $5.29/Bbl to $5.93/Bbl on Friday. Brent crude settled at $75.55/Bbl on Friday. U.S. retail gasoline prices were 3 cents lower last week at $2.65 per gallon. 

For the week ending Nov. 6, crude oil inventories increased by 1.8 million barrels (MMBbls), distillate inventories increased by 0.3 MMBbls, and gasoline inventories increased by 2.5 MMBbls. All inventories for crude and refined products were higher than forecasted. U.S. refinery utilization decreased 0.7 percent to 79.9 percent.

Compared to last year, the EIA estimates that the four-week rolling average U.S. gasoline demand was down 1.0 percent from last year. Distillate fuel demand was down 13.8 percent and jet fuel demand was down 4 percent. Total products supplied to the U.S. market were down by 4.7 percent compared to last year.

The International Energy Agency (IEA) revised up its oil demand forecast for 2009 and 2010 due to increased demand in China in its latest monthly report. The IEA forecast global oil demand to average 84.8 million barrels per day (MMBpd) in 2009, up 1.7 percent year on year. In 2010, demand is expected to rise to 86.2 MMBpd up 1.6 percent compared to 2009.

Last month, China’s crude oil imports were the second highest ever. China’s industrial production in October was 16.1 percent higher than a year ago.

Economy:

New jobless claims fell by 12,000 last week to 502,000 the lowest since January 2009. The four-week average dropped for a 10th straight week to the lowest in almost a year. Consumer confidence fell for the second month in a row in November.

The U.S. dollar fell to a 15-month low against major currencies after the group of 20 nations agreed to maintain stimulus measures to boost economic growth. In addition, the Federal Reserve’s decision to keep interest rates low for an extended period also helped to push the dollar lower and gold higher. 

Several Asian countries purchased U.S. dollars last week to prevent their currencies from weakening against the dollar. The president of the World Bank said that the U.S. has a little ability to prevent the dollar from weakening. He said that the global economic stimulus could lead to inflation in commodity prices. 

Gold advanced to a record high of $1,122.85 an ounce. India’s central bank made a large purchase of gold and other central banks are also considering purchasing gold.

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Apache's Weekly Energy Perspective is a weekly publication of summaries and statistics at a glance designed to keep you updated on the latest industry events.

Editor:  Britt Dearman E-mail:  britt.dearman@apachecorp.com Phone:  (713) 296-7038