HOUSTON, Aug. 18 -- Crude futures prices continued climbing to new highs Tuesday after a Russian court rejected a petition from OAO Yukos to suspend collection of $3.4 billion in back taxes from the company.
The move didn't directly affect the Russian's oil company's current operations, but it triggered speculative buying in oil futures markets.
Analysts also pointed out that newly released US economic data showed that high petroleum prices in recent months have not yet fired inflation nor hindered economic recovery.
In its latest monthly oil market report Wednesday, the Organization of Petroleum Exporting Countries noted that the forecast growth of the US gross domestic product for 2004 has been reduced to a still healthy 4.3%. The forecast for Japan increased by 0.3% to 4.3%, and the Euro-zone forecast was up slightly to 1.9%. For members of the Organization for Economic Cooperation and Development, the forecast was unchanged at 3.5% growth. "Forecasts for 2005 imply a return to more normal growth rates following the sharp economic recovery which began in 2003," the report said.
Meanwhile, average prices for OPEC's basket for seven benchmark crudes broke all recordsmonthly, weekly, and dailyin July and early August. "On a monthly basis, the rise of $1.68/bbl in July brought the monthly average to an unprecedented level of $36.29/bbl. Besides the previous monthly high of $36.27/bbl reached in May of this year, the basket [price] has never been above $34/bbl since October 1990," OPEC reported. The report noted a new weekly high average price of $37.40/bbl for the week ended July 29 and a daily record of $40.08/bbl on Aug. 11, that has since been surpassed. On Tuesday, OPEC's basket price was up by 5¢ to $41.75/bbl.
The September contract for benchmark US light, sweet crudes jumped by 70¢ to a new record closing of $46.75/bbl after earlier touching an all-time high of $46.95/bbl Tuesday on the New York Mercantile Exchange, while the October contract gained 57¢ to $46.26/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., continued to follow the near-month futures price, up by 70¢ to $46.75/bbl.
Heating oil for September delivery increased by 1.91¢ to $1.2219/gal on NYMEX. Gasoline for the same month inched up by 0.1¢ to $1.3055/gal. However, the September natural gas contract slipped by 0.5¢ to $5.37/Mcf, "near 5-month lows as the market waits for some new fundamental information to give it direction," said analysts Wednesday at Enerfax Daily.
In London, the September contract for North Sea Brent crude advanced by 30¢ to $42.99/bbl Tuesday on the International Petroleum Exchange. Gas oil for September delivery increased by $3 to $389.25/tonne. The September natural gas contract jumped by 5.2¢ to the equivalent of $3.98/Mcf on IPE.
Contact Sam Fletcher at firstname.lastname@example.org