Oil Prices Rally on Iran Tanker Attack Report

Oil Prices Rally on Iran Tanker Attack Report
WTI and Brent crude oil prices posted solid gains Friday following reports of more unrest in the Arabian Peninsula region.

Among the commodities tracked by Rigzone, only Henry Hub natural gas declined Friday. November gas futures lost less than one cent to settle at $2.21. Gas is down six percent for the week. Seng attributes the downtrend to rising production, “normal” storage levels and low demand. He also noted that EIA’s Weekly Natural Gas Storage Report revealed:

  • An injection of 98 billion cubic feet (Bcf) against forecasts calling for 94 Bcf, indicating less demand – or more supply – than expected
  • Total inventory of 3.42 trillion cubic feet, or 16 percent (472 Bcf) above the year-ago level and 0.3 percent (9 Bcf) below the five-year average
  • 93.5 Bcf per day (Bcfd) of dry gas production last week compared to 81.5 Bcfd, with a drop in the power sector and a slight decline in liquefied natural gas (LNG) exports
  • Gas exports to Mexico at 5.4 Bcfd and LNG exports at 6.1 Bcfd

In addition to a mild start to autumn temperature-wise, the Pacific Gas & Electric power outages in California could reduce demand for gas-fired generation in that region, Seng noted.

“Technically, November natural gas is trading right at its five- and 10-day moving averages but below its 20-day moving average,” he concluded. “Momentum indicators are showing a solidly oversold condition.”

To contact the author, email mveazey@rigzone.com


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