Oil prices continued climbing Aug. 16 with front-month crude up 1.3% in the New York market despite news reports that an unnamed member of President Barack Obama’s administration indicated the possible release of Strategic Petroleum Reserves to drive down gasoline prices at the pump.
Many analysts have long anticipated the administration will release SPR oil in an appeal to voters ahead of the November presidential election. In the latest trading session, however, oil commodities followed the rise of the equity market “after a cluster of blue-chip companies reported better-than-expected second quarter earnings,” indicating economic recovery, said analysts in the Houston office of Raymond James & Associates Inc.
The Conference Board Inc. said Aug. 17 consumer confidence increased 0.4% in July—primarily the result of increased applications for residential construction permits and decreased applications for unemployment benefits—after dropping 0.4% in June. That raised its Consumer Confidence Index to 95.8%, matching its May level, the Associated Press reported.
Meanwhile, the Energy Information Administration earlier reported US emissions of carbon dioxide during the first 4 months of 2012 fell to the lowest level since 1992 as power plants switched from coal to cheaper and incidentally cleaner natural gas for fuel. An AP survey of “environmental experts, scientists, and utility companies” indicated “virtually everyone believes the shift could have major long-term implications for US energy policy” via the increased production of gas in the US. The press association also noted the environmental change is the result of market forces and not political mandates. US natural gas prices continued to fall in the Aug. 16 market.
“Both government and industry experts said the biggest surprise is how quickly the electric industry turned away from coal,” the AP reported. It cited the EIA report that use of coal to fuel power plants fell to 34% in March—“the lowest level since it began keeping records nearly 40 years ago”—from 50% in 2005.
The September and October contracts for benchmark US light, sweet crudes climbed $1.27 each to $95.60/bbl and $95.89/bbl, respectively, Aug. 16 on the New York Mercantile Exchange. On the US spot market, West Texas Intermediate at Cushing, Okla., also was up $1.27 to $95.60/bbl in step with the front-month futures contract.
Heating oil for September delivery gained 3.77¢ to $3.12/gal on NYMEX. Reformulated stock for oxygenate blending for the same month slipped 0.08¢ but closed essentially unchanged at a rounded $3.08/gal.
The September natural gas contract dropped 2.4¢ to $2.72/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., was down 1.1¢ to $2.77/MMbtu.
In London, the September IPE contract for North Sea Brent rose 65¢ to $116.90/bbl. Gas oil for September gained $8.25 to $977.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased $1.46 to $112.11/bbl. OPEC’s Vienna office will be closed Aug. 20.
Contact Sam Fletcher at firstname.lastname@example.org.