MARKET WATCH: Rumors of OPEC action boosts oil prices

Oil prices rebounded Apr. 18 with the front-month crude contract up 1.2% from its low for the year in the previous session on rumors ministers of the Organization of Petroleum Exporting Countries may call a special meeting in response to sinking markets.

Natural gas escalated 4.4% after the Energy Information Administration reported the injection of 31 bcf of natural gas into US underground storage in the week ended Apr. 12, less than Wall Street’s consensus for a 35 bcf gain. That increased working gas in storage to 1.704 tcf, down 794 bcf from a year ago and 74 bcf below the 5-year average (OGJ Online, Apr. 18, 2013).

The SIG Oil Exploration & Production Index and the Oil Service Index followed oil and gas price increases, up 6.5% and 2.7%, respectively. However, analysts in the Houston office of Raymond James & Associates Inc. reported the Standard & Poor’s 500 Index slipped 0.7% to its lowest closing in April.

“Oil markets finally enjoyed some sustained upside, with [crude] benchmarks performing relatively well,” said Marc Ground at Standard New York Securities Inc., the Standard Bank Group. “Both are now facing key technical resistance levels, $90/bbl and $100/bbl for West Texas Intermediate and Brent respectively.

Energy prices

The May contract for benchmark US light, sweet crudes regained $1.05 to $87.73/bbl Apr. 18 on the New York Mercantile Exchange. The June contract took back $1.03 to $88/bbl. On the US spot market, WTI at Cushing, Okla., was up $1.05 to $87.73/bbl.

Heating oil for May delivery rebound by 4.45¢ to $2.78/gal on NYMEX. Reformulated stock for oxygenate blending for the same month increased 2.65¢ to $2.76/gal.

The May natural gas contract escalated 18.7¢ to $4.40/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., rose 1.2¢ to $4.25/MMbtu.

In London, the June IPE contract for North Sea Brent recovered $1.44 to $99.13/bbl. Gas oil for May advanced $3 to $828.25/tonne.

The average price for OPEC’s basket of 12 benchmark crudes dropped 36¢ to $96.35/bbl.

Contact Sam Fletcher at samf@ogjonline.com.

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