Oil, gas prices show slight changes during lenten week

The shortened trading week due to the Lenten season caused minimal change in oil prices during the period.  Prices went up the first day of the week only to fall the next two days due to reports of U.S. crude supply build-up. Thursday saw prices move up again. Wednesday’s decline was partly due to poor sales of Spanish bonds.  Spain’s financial sector appeared shaky, warding off badly needed foreign investments. Also, Germany’s industrial sector had slowed down.  These, along with a decline in February factory sales contributed to the mid-week fall.

Oil imports on the week before last were remarkably high, pushing up oil inventory supplies to 9 million barrels. The fair March weather failed to bring in brisk business as U.S. spending on oil and oil products was lower by 4.7 percent versus the 2011 figure.  The U.S. economy did not fare well either as it failed to bring in more jobs as needed. The apparent low levels of consumer spending on oil products vis-a-vis last year’s level leads one to surmise that economic recovery may still be far into the horizon and that current investment strategies in support of trade and industry may have to be reviewed.

The price of gasoline went up by a measly one cent per gallon from last week but some project that prices may go up some more due to changes in crude oil prices as well as shifts to higher priced gas blends. Big oil company Shell may soon finish its US$10B Louisiana facility designed to transform natural gas into more costly diesel fuel.

Prices of natural gas dropped as it closed a few cents above 2 dollars per million. Gas supply shoots up at an unexpected rate. Oil rig operations are no longer limited to natural gas as drilling activities cover both oil and natural gas.

By Chris Termeer

Chris Termeer

Chris Termeer is an oil and gas consultant, industry commentator and analyst. His book, Fundamentals of Investing in Oil and Gas provides a comprehensive overview of all aspects of the oil and gas industry, including exploration, drilling, production, storage, transportation and refining, to name but a few.

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