MARKET WATCH: Middle East tensions raise energy prices

Energy prices escalated Oct. 9 with crude oil up 3.4% in the New York market, approaching Oct. 1 levels, as increased tensions in the Middle East—primarily between Turkey and Syria—overshadowed the slowdown in economic growth.

“Natural gas futures also rose 1.9% as some investors are anticipating a bullish injection [into US underground storage] after a recent cool spell,” said analysts in the Houston office of Raymond James & Associates Inc. “The Oil Service Index and SIG Oil Exploration & Production Index followed commodities higher, ending the day up 0.8% and 2.2%, respectively.” Crude and gas prices were still climbing in early trading Oct. 10.

“Reformulated stock for oxygenate blending (RBOB) and heating oil also posted impressive gains,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. “Clearly participants remain preoccupied with the Turkish-Syria conflict, forgetting recent concerns over the possible glut of US crude oil inventories.”

He said, “Perhaps focus will again shift to US crude production (which reached a 15-year high last week) and gasoline supply (as East Coast refineries come back on line)” following this week’s report on petroleum inventories. The Energy Information Administration’s report was delayed by the Oct. 8 Columbus Day holiday when federal offices were closed. Report of a large build in oil inventories “could spark some downside,” Ground said.

However, EIA’s annual winter fuels report indicated consumers likely will pay more to heat their homes this year simply because this winter is likely to be colder than last winter, which was the warmest on record. EIA speculated heating oil bills will increase 20%.

Although heating bills will be up 15% for natural gas, 13% for propane, and 5% for electricity from last year, those costs will be less than the historical average because prices for those energy sources remain relatively low.

Energy prices

The November contract for benchmark US light, sweet crudes jumped $3.06 to $92.39/bbl Oct. 9 on the New York Mercantile Exchange. The December contract escalated by $3.05 to $92.78/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up $3.06 to $92.39/bbl.

Heating oil for November delivery rose 5.89¢ to $3.20/gal on NYMEX. RBOB for the same month gained 6.56¢ to $2.96/gal.

The November natural gas contract was up 6.4¢ to $3.47/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, La., declined 1.2¢ to $3.18/MMbtu.

In London, the November IPE contract for North Sea Brent climbed $2.68 to $114.50/bbl. Gas oil for October increased $8.50 to $1,002/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes regained $1.59 to $109.46/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

Related Articles

Judge bars Anadarko e-mails as evidence in Macondo blowout hearing

03/21/2014 A federal district judge in New Orleans refused to accept e-mails between Anadarko Petroleum Corp. and BP PLC as evidence in a hearing to determine...

Industry group welcomes most UK budget moves

03/21/2014 Oil & Gas UK voiced support for all but one of several measures affecting the offshore producing industry announced in the UK government’s annu...

MARKET WATCH: Crude oil, gas futures prices slide entering spring

03/21/2014

The first day of spring in the northern hemisphere was marked by lower crude oil and natural gas futures prices.

OMV acquires West of Shetland licenses from Hess

03/21/2014 OMV AG has reached an agreement with Hess Corp. to acquire four licenses in West of Shetland, UK, including Cambo field and the Blackrock prospect,...

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected