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Must-know: Brent prices fluctuated last week
The week started off with Brent prices falling to $85.83 on Monday. The prices fell from $86.13 at the previous market close. This was as a result of Goldman Sachs’ grim forecast for WTI and Brent oil prices.
After two consecutive weeks of bearish inventory reports, crude prices stabilized at levels close to $81 per barrel. Last week, crude prices fell to the lowest levels since 2012.
Crude stocks at Cushing, Oklahoma increased by 776,000 barrels to 21.4 million barrels (or MMbbls) in the week ending October 24. Cushing, Oklahoma is an important hub.
Distillate stocks include heating oil and diesel. The stocks decreased by 5.3 million barrels (or MMbbls) last week. Analysts expected inventories to decrease by 1.4 MMbbls.
Last week, gasoline inventories decreased by 1.2 million barrels (or MMbbls) to 203.1 MMbbls. Analysts were expecting inventories to decline by 900,000 barrels.
U.S. crude oil refinery inputs averaged 15.1 MMbbls/d during the week ending October 24. Input levels were 79,000 bpd less than the previous week’s average.
On October 29, the U.S. Energy Information Administration (or EIA) released inventory data for the week ending October 24. Inventories increased less than analysts expected.
The U.S Energy Information Administration (or EIA) reports weekly figures on crude oil inventories every Wednesday. Crude oil inventory levels change based on demand and supply trends.
Propane is a natural gas liquid (or NGLs). NGLs are hydrocarbons—in the same family of molecules as natural gas and crude oil. Other NGLs include Ethane, butane, and pentane.
Winter forecasts aren’t lending any support to natural gas prices. The National Oceanic and Atmospheric Administration has (or NOAA) forecast milder temperatures this year compared to last year.
Record-high production levels have ensured that an adequate supply of natural gas is available before winter starts. The EIA anticipates that inventory levels will be 3,532 bcf by the end of this month.
Natural gas prices started the week with a fourth daily fall. Prices fell by almost 2%, closing at $3.56 MMBtu (million British thermal units). This is their lowest in almost a year.
On October 30, the U.S. Energy Information Administration (or EIA) reported an 87 billion cubic feet (or bcf) natural gas inventory build for the week ending October 24. Inventories increased to 3,480 bcf.
The U.S. Energy Information Administration (or EIA) reports natural gas inventory figures every week. Natural gas is an important fuel worldwide. Its uses span from power generation to plastics.
Peabody Energy forecasts an uptick for PRB, or Powder River Basin coal, in 2015. It expects rail issues will ease and utilities will scramble to replenish stockpiles of coal, which are down 30% since the start of 2014.
Although the company sprang some positive surprises in its 3Q 2014 earnings report, the stock market played it cautious. Peabody’s stock gained back just 2.6% of the nearly 50% it’s lost since the beginning of the year.
The accounts payable are up by $195 million to $1.66 billion, while inventories are down by $57 million to $491 million. This boosts cash flows as the net investment in working capital falls, and cash is freed up.
On a slightly positive note, selling and administrative expenses came down to $52.9 million in 3Q 2014 from $55 million in 3Q 2013, due to cost-cutting efforts and lower tonnage.
Peabody Energy Corporation (BTU) reported a 2.5% increase in U.S. operating-cost per ton, up to $15.40 in 3Q 2014 compared to $15.03 in 3Q 2013. The increase was primarily on account of fixed costs being divided among fewer tons.
The country has over 60 billion tons of reserves. But, India experiences issues such as land-acquisition delays, environmental clearances, and inefficient coal production techniques. And these factors subdue production levels.