OGJ Senior Staff Writer
HOUSTON, Oct. 6 -- Oil prices settled above $70/bbl on the New York Mercantile Exchange Oct. 5, which analysts attributed to strengthening equity markets and a weakening US dollar.
US stock markets climbed Oct. 5, encouraging investors to hope that the economy is recovering, which could trigger growing demand for crude.
“The fundamentals of the oil market are on a slow but sure improving trajectory,” Barclays Capital Research analysts said in an Oct. 6 research note.
Nariman Behravesh, IHS Global Insight chief economist, recently told participants at an IHS Herold Pacesetters Energy Conference in Greenwich, Conn., that he believes the US is in the early phase of an economic recovery.
“It won’t feel like a recovery until the second half of next year,” Behravesh said.
The November contract for benchmark US light, sweet crudes gained 46¢ on Oct. 5, closing at $70.41/bbl while the December contract gained 28¢ to close at $70.61/bbl on NYMEX.
On the US spot market, West Texas Intermediate at Cushing, Okla., was up 46¢ to $70.41/bbl.
Heating oil for November delivery dropped 0.52¢ to $1.79/gal on NYMEX. Reformulated blend stock for oxygenate blending (RBOB) for the same month rose 1.3¢ to $1.75/gal.
The November contract for natural gas, however, climbed 26.9¢ to $4.987/MMbtu on NYMEX. It was the highest NYMEX closing price since mid January. Analysts said forecasts for below-normal temperatures across much of the central US next week caused gas prices to briefly rise about $5/MMbtu before the trading session ended. Gas at Henry Hub, La., rose 54¢ to $3.06/MMbtu.
In London, the November IPE contract for North Sea Brent was down 3¢ to $68.04/bbl. Gas oil for October dropped $10 to $544.25/tonne.
The average price for OPEC’s basket of 12 benchmark crudes lost 35¢ to $66.81/bbl.
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MARKET WATCH: NYMEX oil settles above $70/bbl