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Oil and Natural Gas Futures Diverge Under Shadow of Government Shutdown

By  +Follow October 1, 2013 11:43AM
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While stocks bravely rallied in the face of the shutdown of the US government that began on Tuesday, oil and natural gas prices diverged.

West Texas Crude contracts for November delivery were down 1.10 percent to $101.20 per barrel, while the same contracts for Brent crude dipped 1.22 percent to $107.05 per barrel.

Meanwhile, natural gas contracts destined for a delivery date of November 13 were up nearly 2 percent to $3.63 per million BTUs on the New York Mercantile Exchange.

Crude prices have come down as a result of several factors. Against the backdrop of the 3-year old civil war in Syria that continues to rage, US Secretary of State John Kerry met with the Iranian Foreign Minister on the sidelines of the UN General Assembly meeting in New York City last week, in the highest-level diplomatic contact between the two countries since the revolution of 1979.

It was a stark and sudden contrast to US threats of military strikes against Syria, a close ally of Iran, that seemed a near certainty not three weeks ago. The apparent willingness of all parties to resort to dialogue rather than increased hostilities has eased concerns of supply disruption in the region.

The recent resumption of Libyan oil production, much of which had been brought to a standstill for extended periods by the country’s many unruly revolution-era militias, has also contributed to the downward pressure on crude prices.

The current impasse in Washington, D.C. over the continued functioning of the federal government, and the expected impasse over the debt ceiling over the coming weeks has also played its part in lower oil prices.

Natural gas, on the other hand, has been the beneficiary of recent bullishness around independent producers in the US. Last week, Goldman Sachs (GS) analysts returned from a visit to the Bakken Shale, and initiated coverage on Continental Resources (CLR) and Oasis Petroleum (OAS) . Both stocks jumped in reaction to the news, and were also up on Tuesday, 3.6 and 2.4 respectively.

Goldman Analysts were particularly enthusiastic about independent gas producers operating not only in the Bakken Shale, but also in the US’s many other shale prospects such as the Marcellus that lies underneath large swathes of the Northeastern portion of the country.

[Image Courtesy of Wikimedia Commons]

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for gs
myrac
18 Dec 14 03:18:49
RT @GoldmanSachs: $GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
UPBOptionMil
18 Dec 14 03:02:48
RT @OMillionaires: $FDX upgraded to Conviction Buy from Neutral at $GS raises pt to $211 from $173 ~~ BOLD
Admiral Markets
18 Dec 14 03:00:26
RT @GoldmanSachs: $GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
TRADEaddiction
18 Dec 14 02:50:22
$FDX upgraded to Conviction Buy from Neutral at $GS raises PT to $211 from $173
Option Millionaires
18 Dec 14 02:46:05
$FDX upgraded to Conviction Buy from Neutral at $GS raises pt to $211 from $173 ~~ BOLD
Option Millionaires
18 Dec 14 02:44:29
$SAM Boston Beer initiated with a Buy at Nomura Target $320 - second analyst over $300 now - more will follow - $GS still at neutral
Carol Pepper
18 Dec 14 02:35:08
RT @GoldmanSachs: What Top 10 Themes will shape the markets in 2015? Click here to see the list from $GS Global Investment Research: http:/…
indestructiblcedar97
18 Dec 14 02:02:04
RT @GoldmanSachs: $GS economist Huw Pill sees 0.9% growth for #Euro area in 2015 against a 'vulnerable' economic backdrop: http://t.co/3Xka…
Omar Ahmed
18 Dec 14 01:47:36
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18 Dec 14 01:40:27
RT @GoldmanSachs: $GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
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18 Dec 14 01:36:58
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18 Dec 14 01:23:40
RT @GoldmanSachs: $GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
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18 Dec 14 01:16:24
RT @GoldmanSachs: $GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
✌
18 Dec 14 01:12:31
RT @GoldmanSachs: $GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
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18 Dec 14 00:44:27
RT @GoldmanSachs: #TBT: Street view of the original $GS office, founded in 1869 as a commercial paper dealer at 30 Pine Street. #GS145 http…
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18 Dec 14 00:41:02
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18 Dec 14 00:37:02
RT @GoldmanSachs: $GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
SocialImpactFinance
18 Dec 14 00:36:39
RT @GoldmanSachs: $GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
Darshan Chandarana
18 Dec 14 00:34:30
RT @GoldmanSachs: $GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
Goldman Sachs
18 Dec 14 00:33:37
$GS economist Andrew Tilton on Asia reforms, impact of lower oil prices and Fed policy @BloombergTV http://t.co/iN9EkmvZJt
Stockaholics
18 Dec 14 00:01:41
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17 Dec 14 23:35:59
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17 Dec 14 23:31:27
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17 Dec 14 23:26:24
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17 Dec 14 22:18:46
RT @GoldmanSachs: #TBT: Street view of the original $GS office, founded in 1869 as a commercial paper dealer at 30 Pine Street. #GS145 http…
Eternity101
17 Dec 14 21:25:23
I N D I C A T O R S $BANK $RTH $VXO $VIX $TNX $TLT $SOX $JJC $GLD $GS $TRIN $TICK $OEX $DJU $FXY $BPSPX https://t.co/I3XMgQw0yv
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17 Dec 14 20:06:24
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17 Dec 14 19:06:10
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Wilberg Rivera, Jr.
17 Dec 14 18:32:01
RT @GSCareers: Art, theatre & yoga. When she's not working in our #London office, $GS Associate Kate focuses on her passions: http://t.co/A…
Ravi Romo
17 Dec 14 18:26:06
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GO AHEAD
17 Dec 14 18:12:39
RT @GoldmanSachs: $GS economist Goohoon Kwon discusses #oil price impact and economic outlook for #Taiwan: http://t.co/F7vg1nBYbW (article …
diel clover
17 Dec 14 17:58:35
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17 Dec 14 17:57:25
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17 Dec 14 17:44:48
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MacroPru
17 Dec 14 17:40:54
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Ronnie Matrix.
17 Dec 14 17:39:52
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17 Dec 14 17:34:31
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SocialImpactFinance
17 Dec 14 17:29:27
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`LG
17 Dec 14 17:27:18
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Goldman Sachs
17 Dec 14 17:23:20
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17 Dec 14 17:19:32
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17 Dec 14 16:49:43
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17 Dec 14 16:49:07
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17 Dec 14 16:16:33
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17 Dec 14 15:51:40
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17 Dec 14 15:50:11
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17 Dec 14 15:33:40
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Haager
17 Dec 14 15:30:12
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17 Dec 14 15:26:51
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17 Dec 14 15:14:47
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By  +Follow October 1, 2013 11:43AM
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