By OGJ editors
HOUSTON, Oct. 25 -- Natural gas prices on the New York Mercantile Exchange reached their highest level in more than 18 months Friday, and crude oil closed at another NYMEX record, settling above $55/bbl.
The escalating prices stunned traders and analysts. Heating oil also reached a record during the Friday session, which traders said was becoming a routine event given the turbulent energy complex.
News of further growth in China's economy combined with fears of short worldwide oil supplies, some analysts noted. On Friday, China announced that its gross domestic product for the first three quarters of the year was up 9.5% from the same period last year. China imports more oil than any other Asian country.
Meanwhile, Saudi Arabia reaffirmed its commitment to the stability of world oil prices during a meeting of Saudi Oil Minister Ali Al-Naimi and Managing Director of the International Monetary Fund Rodrigo de Rato in Jeddah.
Al-Naimi said Saudi Arabia would provide adequate oil supplies to the market, the Saudi Press Agency reported.
Separately, Organization of Petroleum Exporting Countries Pres. Purnomo Yusgiantoro urged members to increase oil production in preparation for winter.
"Oil demand is increasing ahead of the winter. I ask OPEC and non-OPEC producers to increase oil production to ensure there is enough supply in the market," Yusgiantoro said. OPEC will meet next in December.
Yusgiantoro has said OPEC has spare capacity of 1.5 million b/d.
The December contract for benchmark US light, sweet crudes climbed by 70¢ to $55.17/bbl Friday on NYMEX, while the January contract increased by 64¢ to $54.69/bbl. However, on the US spot market, West Texas Intermediate held steady at $54.47/bbl, the same closing price as on Thursday.
Heating oil for November delivery escalated by 1.45¢ to a closing of $1.59/gal Friday on NYMEX. Gasoline for the same month advanced by 2.54¢ to $1.44/gal.
The November natural gas contract was up by 40.8¢ to $8.11/Mcf. "This is really all about the energy complex as a whole. Speculators are able to push up these prices sky-high because the price of crude oil is soaring," said analysts Sunday at Enerfax Daily.
Natural gas prices have gained more than $3.50/Mcf, or 77%, since Hurricane Ivan arrived in mid-September, Enerfax analysts said.
In London, the December North Sea Brent crude contract increased by 55¢ to $51.27/bbl on the International Petroleum Exchange.
The average price for the OPEC basket of seven benchmark crudes was down by 9¢ to $46.52/bbl Friday.