Market watch: Interest rate reduction boosts energy futures prices

By the OGJ Online Staff

HOUSTON, Aug. 22 -- The Federal Reserve's decision to cut US interest rates to the lowest level since 1994 raised prices for oil and refined products in international futures markets Tuesday.

Traders speculated that the 0.25% reduction would help stimulate the US economy and stem the declining demand for petroleum.

The expiring September contract for benchmark US sweet, light crudes jumped 73¢ to $27.91/bbl on the New York Mercantile Exchange, while the October contract gained 49¢ to $26.72/bbl.

Oil markets got another boost from a bullish report of declining US petroleum inventories, issued by the American Petroleum Institute after the close of trading. The API reported US oil stocks fell by 5.4 million bbl last week, while US gasoline inventories dropped by 3.1 million bbl. Distillate inventories, including home heating oil, were down by 856,000 bbl.

As a result of that report, prices for the October and November oil futures contracts continued to climb in after-hours electronic trading to $27.15/bbl and $26.89/bbl, respectively.

Unleaded gasoline for September delivery surged 4.1¢ to78.41¢/gal during Tuesday's trading session on the NYMEX. Home heating oil for the same month rose 1.64¢ to 72.99¢/gal. However, the September natural gas contract dipped 2.1¢ to $3.17/Mcf.

The strong performance of NYMEX gasoline futures helped pull up North Sea Brent oil prices on the International Petroleum Exchange in London. Traders decided US demand for gasoline must be booming, especially with the drop in retail pump prices for several weeks prior to the traditional peak in that market.

The October contract for Brent crude gained 44¢ to $25.49/bbl on the IPE. The September natural gas contract also increased by 7.1¢ to the equivalent of $2.53/Mcf.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes soared by 80¢ to $24.28/bbl Tuesday.

Related Articles

Industry group welcomes most UK budget moves

03/21/2014 Oil & Gas UK voiced support for all but one of several measures affecting the offshore producing industry announced in the UK government’s annu...

MARKET WATCH: Crude oil, gas futures prices slide entering spring

03/21/2014

The first day of spring in the northern hemisphere was marked by lower crude oil and natural gas futures prices.

API: Petroleum demand dips in February

03/21/2014 Total US petroleum deliveries, a measure of demand, fell 0.6% from February 2013 to average 18.5 million b/d last month, a 16-year low for the mont...

MARKET WATCH: NYMEX crude oil for April tops $100/bbl

03/20/2014 Crude oil futures prices for the April contract climbed above $100/bbl on the New York market on Mar. 19, which analysts attributed to positive ind...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected