Crude oil prices rose slightly in electronic trading Oct. 30 in the New York market, but the front-month natural gas futures contract fell 3% on fear of extended power outages in the wake of Superstorm Sandy.
The Associated Press reported some 6.5 million homes and businesses are without power “as far west as Wisconsin and as far south as the Carolinas,” including 4 million in New York and New Jersey.
“Yesterday was another dark day on Wall Street as the market was closed for the second business day in a row,” said analysts in the Houston office of Raymond James & Associates Inc. It was the first weather related multiday closing of the New York Stock Exchange since the blizzard of 1888.
Floor trading reopened to cheers Oct. 31. “With US financial markets open again, we should see a heightened level of activity as participants play catch-up. This will most likely be accompanied by increased volatility across the commodity space,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group.
“Given the pent-up demand from the last couple of days, increased volume could create unusual price momentum out of the gates. But just in case things get too erratic, the Securities and Exchange Commission has the option to halt trading midday,” Raymond James analysts said.
“After sustained pressure, West Texas Intermediate managed a modest recovery yesterday as refineries on the East Coast began resuming operations,” Ground said. “While the extent of the damage to refining capacity has yet to be assessed, with crude oil prices at such low levels the market is unwilling to go short. Heating oil and reformulated stock for oxygenate blending (RBOB) both lost ground yesterday. Brent ended the day slightly down.”
He said, “As markets speculate the impact of Sandy on future crude oil and product demand in the US, yesterday’s release of American Petroleum Institute inventory numbers have been largely ignored.” API reported commercial US crude inventories dropped 351,000 bbl to 371.7 million bbl in the week ended Oct. 26, with gasoline stocks down 173,000 bbl to 199.2 million bbl and distillate fuels falling 2.6 million bbl to 118.2 million bbl.
The Energy Information Administration report usually released at midweek was postponed because of the storm.
The December and January contracts for benchmark US light, sweet crudes rose 14¢ each to $85.68/bbl and $86.19/bbl, respectively, Oct. 30 on the New York Mercantile Exchange.
Heating oil for November delivery lost 2.86¢ to $3.09/gal on NYMEX. RBOB for the same month declined 2.8¢ to $2.73/gal.
The new front-month December natural gas contract dropped 11.2¢ to $3.69/MMbtu. US spot market prices for oil and gas were not updated.
In London, the December IPE contract for North Sea Brent was down 36¢ to $109.08/bbl. Gas oil for November fell $7 to $963.50/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes regained 15¢ to $106.12/bbl.
Contact Sam Fletcher at firstname.lastname@example.org.