The February crude contract posted an “underwhelming” gain Jan. 10 in the New York futures market against a background of encouraging economic indicators, analysts said. Natural gas climbed 2.6%, however, and corporate energy stocks improved with the SIG Oil Exploration & Production Index up 1.2% and the Oil Service Index gaining 1.3%.
“Things are looking up in China too, with exports surging 14.1% last month, indicating that an uptick in Chinese oil demand may be on deck,” said analysts in the Houston office of Raymond James & Associates Inc. “The more optimistic outlook on global growth weighed on the US dollar yesterday, which is also positive for crude.” As for the crude contract’s unimpressive performance, they said, “Perhaps the market figured out what we've been saying all along: a lot more supply needs to go offline for the global oil market to reach a balance.”
The euro surged against the dollar after Mario Draghi, president of the European Central Bank, announced interest rates for the Euro-zone will remain unchanged.
However, Marc Ground at Standard New York Securities Inc., reported commodity markets were “rattled” in early trading Jan. 11 by a stronger-than-expected increase in Chinese consumer inflation, which rose 2.5% in December from the year-ago level. That’s “well up from the 2% pace seen in November and above the 2.3% consensus,” he said.
The February contract for benchmark US light, sweet crudes climbed 72¢ to $93.82/bbl Jan. 10 on the New York Mercantile Exchange. The March contract increased 71¢ to $94.27/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 72¢ to $93.82/bbl.
Heating oil for February delivery lost 1.56¢ to $3.05/gal on NYMEX. Reformulated stock for oxygenate blending for the same month recovered 1.44¢ to $2.79/gal.
The February natural gas contract rebound 8¢ to $3.19/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, La., dropped 4.6¢ to $3.07/MMbtu.
In London, the February IPE contract for North Sea Brent was up 13¢ to $111.89/bbl. Gas oil for January was unchanged at $948.50/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased 29¢ to $109.30/bbl.
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