Save Article Instructions
Close 

MARKET WATCH: Crude ends brief rally as energy prices decline

Energy prices fell Dec. 13, ending a 2-day rally, with front-month crude and natural gas down 1% each in the New York market despite—or perhaps because of—a “frank discussion” between President Barack Obama and House Speaker John Boehner of the budget deadlock. No resolution has yet been reached.

The equity market also was down, terminating its 6-day rally as Standard & Poor’s 500 Index dropped 0.6% amid market uncertainty. “Crude traded down with the broader market, and gas fell on supply concerns given higher-than-average temperatures across the US,” said analysts in the Houston office of Raymond James & Associates Inc.

In other news, the US Department of Labor reported retail gasoline prices fell 7.4% in November, the biggest decline in 4 years, and offset a 0.2% increase in food prices. As a result, the seasonally adjusted consumer price index dropped 0.3% last month. In the past year, consumer prices have climbed 1.8%.

Energy prices

The January contract for benchmark US light, sweet crudes dropped 88¢ to $85.89/bbl Dec. 13 on the New York Mercantile Exchange. The February contract fell 87¢ to $86.44/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., remained in lockstep with the front-month futures contract, down 88¢ to $85.89.

Heating oil for January delivery decreased 2.31¢ to $2.94/gal on NYMEX. Reformulated stock for oxygenate blending for the same month declined 4.44¢ to $2.60/gal.

The January natural gas contract continued to retreat, down 3.5¢ to $3.35/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., lost 6.6¢ to $3.27/MMbtu.

In London, the January IPE contract for North Sea Brent dropped $1.59 to $107.91/bbl. The new front-month January contract for gas oil decreased $2.50 to $920.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes, however, increased 18¢ to $106.01/bbl.

Contact Sam Fletcher at samf@ogjonline.com.


To access this Article, go to:
http://www.ogj.com/content/ogj/en/articles/2012/12/market-watch-crude-ends-brief-rally-as-energy-prices-decline.html