Energy Sector Investing

Keystone Pipeline To Resume Oil Flow

The U.S. Pipeline and Hazardous Materials Safety Administration has approved the resumption of crude oil flows for TransCanada Corp's Keystone oil pipeline.  The pipeline suffered an outage on June 29 after a minor spill at a Kansas pumping station.  The 591,000 barrel-a-day pipeline transports crude oil from Alberta, Canada to Cushing, Oklahoma.

Canada is the largest exporter of crude oil to the United States and the pipeline disruption raised oil prices in the United States during the week.

Crude oil for July delivery fell 1.4% to $98.99 a barrel on Friday amid weak economic data in the United States.

Oil Prices Up 24% Since February

Oil prices were higher again on Tuesday, with crude oil for May delivery gaining 22 cents to $86.84 a barrel.  Oil prices are now up 24% since February 2010.

The U.S. Energy Information Administration (EIA) released its Short-Term Energy and Summer Fuels Outlook on April 6.  The report forecasts West Texas Intermediate (WTI) crude oil spot prices to average $81 per barrel during the summer and for oil to average $85 per barrel by the fourth quarter of 2011.

During the summer driving season (April 1 and September 30) the EIA predicts that regular-grade motor gasoline retail prices will average $2.92 per gallon.

The average U.S. retail price for gasoline is currently $2.83 per gallon.  Gasoline prices are 79.1 cents higher than during the same period in 2009.

Oil Prices Hit 18 Month High

Oil prices spiked up $1.75 on Monday, hitting their highest levels in 18 months.

Crude oil for May delivery closed $86.62 a barrel in trading on the New York Mercantile Exchange.  The May oil contract was up $1.75 for the day, adding to a gain of $1.11 in the previous trading session.

Upbeat economic news out of the United States and continued strong demand from China is driving oil prices higher and leading many analysts to predict that crude oil prices could once again cross into triple digits.

Brent crude oil also higher, gaining $1.87 to settle at $85.88 on the ICE futures exchange in London.

In other energy sector contracts:

NYMEX May heating oil gained 5.08 cents to $2.2675 a gallon.

NYMEX May gasoline gained 2.65 cents to $2.3502 a gallon.

NYMEX May natural gas was up 19.1 cents to $4.277 per 1,000 cubic feet.

Petroleum Report Crude Oil Inventories Increase 2.9M

The Energy Information Administration reports that U.S. crude oil inventories rose by 2.9 million barrels last week.  This increase was higher than analyst forecasts of 2.65 million barrels.

U.S. crude oil inventories (excluding those in the Strategic Petroleum Reserve) now stand at 354.2 million barrels.

U.S. crude oil imports decreased last week by 337,000 barrels per day.  For the week ending March 26, 2010 the U.S. oil imports averaged 9.1 million barrels per day.

Oil Prices Firm On Upbeat Consumer Confidence

Oil prices held firm on Tuesday in the wake of a better than anticipated report on consumer confidence.

In trading on the New York Mercantile Exchange crude oil for May delivery gained 20 cents to $82.37 a barrel.

Brent crude oil was up 11 cents to $81.28 in trading on the ICE futures exchange in London.

Other energy sector NYMEX future contracts:

May heating oil $2.1316 a gallon

May gasoline $2.2721 a gallon

May natural gas $3.973 per 1,000 cubic feet.

US Oil & Natural Gas Rig Count 1, 444

The number of rigs drilling for oil and/or natural gas in the United States rose by 17 last week to 1,444.

According to data released by Baker Hughes Inc. the number of natural gas rigs was up 2 rigs to 941.  The oil rig count was was up by 15 rigs to 489. The number of miscellaneous rigs  count stood at 14, the same as the previous week.  During the same week in 2009 the rig count stood at 1,039.

Rig counts in the United States are up dramatically from the record low of 488 in 1999, but far below the record high of 4,530 oil and natural gas wells operating in 1981.