Crude prices continued rising Jan. 18 for the third consecutive trading session largely because of increased political tension caused by a hostage takeover by Islamic militants at a gas processing plant in Algeria (OGJ Online, Jan. 16, 2013).
Algerian special forces stormed the plant Jan. 19 to end the 4-day siege. Initial reports indicated 32 rebels and 23 hostages died, but the death count later climbed to 81 with the discovery of more bodies and the subsequent death of one wounded hostage who had been freed. Bomb squads continued to sweep the facility for hidden explosives (OGJ Online, Jan. 18, 2013).
On Jan. 21, Walter de Wet at Standard New York Securities Inc., the Standard Bank Group, reported, “The front-month Brent crude contract is moving largely sideways today” in line with the US dollar “that has also done very little since markets opened.” He said, “The Brent market has failed to break convincingly above the $112/bbl level since mid-November, and we maintain that the bias from current price levels lies to the downside. We believe that demand growth would not be strong enough this year to offset growing supply from non-OPEC members.”
In the US futures market, the front-month contract for benchmark crudes “continued to benefit from post-Seaway pipeline interest as well as some growing optimism over the US economy,” Ground said. “The market still looked confident, adding 7.6 million bbl to speculative longs and once again shedding speculate shorts for the fifth consecutive week, although only 2.3 million bbl were shed this past week (compared with the 7.9 million bbl of the previous week).”
The February contract for benchmark US light, sweet crudes made a modest advance of 7¢ to $95.56/bbl Jan. 18 on the New York Mercantile Exchange. The March contract increased 10¢ to $96.04/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., followed the front-month futures contract up 7¢ to $95.56/bbl.
Heating oil for February delivery gained 3.13¢ to $3.05/gal on NYMEX. Reformulated stock for oxygenate blending for the same month rose 2.84¢ to $2.80/gal.
The February natural gas contract continued to rally, up 7.2¢ to $3.57/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., rebound by 8.5¢ to $3.51/MMbtu.
In London, the March IPE contract for North Sea Brent was up 79¢ to $111.89/bbl. Gas oil for February regained $3.25 to $955.75/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased 91¢ to $108.92/bbl. So far this year, OPEC’s basket price has averaged $108.56/bbl.
Contact Sam Fletcher at firstname.lastname@example.org.