Crude oil prices generally climbed Aug. 6 with crude up 0.8% in the New York market on a weaker dollar and false reports Syrian President Bashar al-Assad was dead.
The Wall Street Journal reported front-month crude rose more than $1/bbl in early trading following a fake online report of Assad’s death. The rumor was attributed to Russia’s interior minister who later denied issuing such a statement. The incident “exposed the oil market's knee-jerk fear of Mideast turmoil,” said the newspaper.
“Support for crude oil and commodities in general remained in place yesterday with positive sentiment around the Euro-zone (Spanish and Italian bond yields have eased lower) helping to sustain [the Aug. 3] rally, which was most likely premised on hopes of further central bank easing (notably from the Federal Reserve Bank),” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group.
“A bombing of the Kirkuk pipeline in Turkey has also added to supply concerns,” Ground said. “Furthermore, tropical storm Ernesto, which is headed towards the Bay of Campeche, an area where most of Mexico’s crude oil production comes from, is reportedly intensifying.”
Natural gas futures were up 1.1% on technical buying in New York after last week's slide said analysts in the Houston office of Raymond James & Associates Inc. The Oil Service Index was up 0.5% while the SIG Oil Exploration & Production Index increased 0.6% as equity prices generally rose on strong earnings reports.
Meanwhile, a massive fire was reported contained but still burning early Aug. 7 at Chevron Corp's 240,000 b/d refinery at Richmond, Calif., an industrial suburb of San Francisco (OGJ Online, Aug. 7, 2012). It was reported the fire started at the refinery’s No. 4 Crude Unit following a series of explosions shortly after an inspection crew discovered a leak at that unit about 6:15 p.m. Aug. 6. It is reported to be California’s third-largest refinery and the largest in the northern section of the state. Only one minor injury and no deaths were reported.
The September contract for benchmark US sweet, light crudes retreated from earlier gains on the New York Mercantile Exchange resulting from rumors of Assad’s death, closing at $92.20/bbl, up 80¢ for the day Aug. 6. The October contract increased 82¢ to $92.46/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., remained in step with the front-month futures contract, up 80¢ to $92.20/bbl.
Heating oil for September delivery rose 1.48¢ to $2.94/gal on NYMEX. Reformulated stock for oxygenate blending for the same month declined 0.88¢ to $2.92/gal.
The September natural gas contract regained 3.1¢ to $2.91/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., continued to retreat, however, down 1.2¢ and also closing at $2.91/MMbtu.
In London, the September IPE contract for North Sea Brent advanced 61¢ to $109.55/bbl. Gas oil for August gained $7.25 to $930.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes climbed $1.21 to $105.67/bbl.
Contact Sam Fletcher at email@example.com.