Review of oil prices 2013

• Published date: 01 July 2014
• Date: 01 July 2014
• DOI: http://doi.org/10.1111/j.1746-9066.2014.00031.x

First quarter 2013

29 December-4 January

Thursday close: $112.86

Crude oil markets celebrated the

New Year with a $3/bbl price rise,

though there appeared to be few

fundamental factors to justify it. A

large US stockdraw mid-week en-

couraged a small rise in Atlantic

Basin crude prices, but other factors

pointed to weak demand in the US,

as crude imports fell and product

inventories rose. An agreement

between the US Congress and the

White House on measures to cut the

federal budget deficit provided sup-

port for crude prices at the start of

the week, as the threat of deep

spending cuts appeared to recede.

However, relief amongst oil traders

proved as temporary as the truce

amongst Washington’s politicians,

and prices began to weaken towards

the weekend.

5-11 January

Friday close: $110.30

Market attention turned towards

Asia where Chinese inflation data

suggested that economic growth was

faltering, which led to a general sell-

off in crude oil markets worldwide.

Abnormally cold weather in north-

ern Asia indicated a contrary direc-

tion for refined products: in particu-

lar, for middle distillate. Asian de-

mand for burning kerosene was high

amid low stocks and falling refinery

production. Gasoil was also rela-

tively strong east of Suez, as were

middle distillate-rich crudes such as

Abu Dhabi’s Murban and various

South East Asian grades.

12-18 January

Friday close: $111.84

Cold weather spread to the Atlantic

Basin, providing support for gasoil

and crude oil. Crude prices also

rose following an attack on the In

Amenas gasfield in Algeria. Market

fundamentals were generally weak.

Light, sweet crudes were affected by

poor demand for gasoline combined

with high stock levels across the

Atlantic Basin. Heavy sweets fared

better in Asia as electricity utilities

increased their oil-burn, and there

was some support for middle distil-

late-rich local crudes, such as Ma-

laysia’s Kikeh.

19-25 January

Friday close: $113.82

Crude oil prices see-sawed through

the week. The violent conclusion of

the hostage crisis at the In Amenas

gas plant, when Algerian forces

stormed the plant, prevented any

major sell-off in crude markets as

traders worried about possible fur-

ther attacks on energy-related instal-

lations in Algeria. Tensions rose

late in the week as the British For-

eign Office reported “a specific,

imminent threat” to foreigners in

parts of Libya. There was some

support for refined product prices

from cold weather across the North-

ern Hemisphere and from an un-

planned outage at the 246,000 bpd

Stanlow refinery in Cheshire, Eng-

land, which helped prices of gasoil

and burning kerosene upwards in

North West Europe; but there was

little sign of strong demand beyond

the ending of the winter weather.

26 January-1 February

Friday close: $115.55

Market optimism about the latest

economic data from Europe and the

US helped to boost the price of the

main Atlantic Basin marker crude

grades by nearly $2/bbl. Light,

sweet crudes benefited from the

unexpected strength of gasoline

markets, due to a combination of

low inventories and refinery outages

in Texas, New Jersey, Libya and

India, and continuing problems at

Stanlow. Sour crude prices rose,

gaining support in Europe from re-

duced exports of Urals, caused by

winter storms in the Black Sea.

Asian demand for middle distillate

assisted sour crude prices upwards

east of Suez, especially for Russian

grades. Oman was the best of the

Middle Eastern crudes, posting gains

of more than $2.25/bbl.

2-8 February

Friday close: $118.90

Crude oil prices continued to rise,

led largely by the strength of refined

products across the barrel. Asian

middle distillate was particularly

strong, partly in anticipation of the

large number of refinery shutdowns

planned for March and April. There

was also additional demand for

gasoil from the Middle East and

Africa. All of this proved bullish for

Persian Gulf and Asian crudes.

Brent and West Texas Intermediary

(WTI) futures meanwhile were

borne aloft largely on optimism

about stockmarkets on both sides of

the Atlantic, and WTI received a

further fillip from a new pipeline

that allowed it to be transported to

the Gulf Coast instead of piling-up

at Cushing, Oklahoma.

9-15 February

Friday close: $117.40

Brent made early gains in the week,

bolstered by strong Asian demand

for light, sweet crudes, but fell back

as it became clear that North Sea

grades were becoming too expensive

in Asia relative to Middle Eastern

crudes. The strength of light, sweet

grades reflected unseasonably strong

demand for gasoline, especially in

the US, where gasoline prices re-

ceived a double boost from the clo-

sure of various cracking units and

strong demand for US gasoline com-

ponents from Latin America and the

Caribbean. European mogas

strengthened on rising imports into

the US East Coast. There was also

good US demand for European feed-

stocks, such as vacuum gasoil, to

make more gasoline. Sour crudes in

Europe weakened on increased ex-

ports of Urals.

16-22 February

Friday close: $113.74

Prices continued to fall as rising

inventories indicated weak demand

amid plentiful supplies of crude.

Futures were particularly volatile.

WTI lost $2/bbl on Nymex on Feb-

ruary 20 in a bout of selling that

REVIEW OF OIL PRICES 2013

Oil and Energy Trends: Annual Statistical Review

© John Wiley & Sons Ltd 2014

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