By OGJ editors
HOUSTON, June 8 -- Fears of terrorist strikes in the Middle East and news of refinery problems propelled energy futures prices upward Monday after a week of slipping on the New York Mercantile Exchange. High demand and the continuing potential for supply disruptions provided an impetus for uneasy traders to cling to higher prices, and some traders said they expect prices to remain at or above $30/bbl for the remainder of the year.
Crude oil futures prices also rebounded on the Tokyo Commodity Exchange Monday. "[Demand in] China is one of the factors, while hedge funds have moved prices up by as much as $6/bbl," said oil analyst Fereidun Fesharaki of Honolulu-based FACTS Inc. in Singapore Monday.
Natural gas prices also have remained strong on the New York Mercantile Exchange (NYMEX) in recent weeks, despite last week's slide following the announcement June 3 by the Organization of Petroleum Exporting Countries of proposed increases in oil production and the sell-offs by speculators and hedge funds with stale long positions.
Brokers said the market seems to have stabilized, but the potential for another strong rally remains limited as supply and demand become more finely balanced.
Energy prices rebound
The July contract price for benchmark US light, sweet crudes regained 17¢ Monday to $38.66/bbl on NYMEX, up from Friday's $38.49/bbl.
The August crude contract rose 22¢ to $38.75/bbl Monday. However, on the US spot market, Monday, West Texas Intermediate at Cushing, Okla., was off by 35¢ to $38.25/bbl from $38.60 Friday.
Refined petroleum products also closed higher Monday, with July unleaded gasoline prices up by 2.35¢ to $1.20/gal Monday on NYMEX. Heating oil for the same month advanced by 69¢ to 98.92¢/gal. The July natural gas contract, however, slipped 5.4¢ to $6.21/Mcf.
In London Monday, the July contract for North Sea Brent crude increased by 29¢ to $35.96/bbl on the International Petroleum Exchange following 4 days of sliding downward. Trading for the day ranged from a high of $36.05/bbl to a low of $34.80/bbl. The July natural gas contract remained steady at the equivalent of $3.835/Mcf on IPE.
The average price for OPEC's basket of seven benchmark crudes dipped 30¢ to $34.64/bbl Monday, down from $34.94/bbl on Friday.