MARKET WATCH: Crude prices rebound in New York market

The front-month crude price recovered 1.6% in the New York futures market June 24 after Enbridge Inc. shut down its 12-in., 17 km Line 37 pipeline after discovering a 750-bbl spill June 22 some 70 km north of Cheecham, Alberta.

That pipeline connects with China National Offshore Oil Corp. (CNOOC) Ltd.’s Long Lake oil sands project. As a precaution, the Canadian company also suspended shipments on the nearby 345,000 b/d Athabasca pipeline and the 350,000 b/d Waupisoo pipeline, although one has already been restored to service. Heavy rain in the area may have caused ground movement that damaged the pipeline, officials said.  There was no estimate as to how long it will take to bring Line 37 back in service.

Meanwhile, natural gas prices continued to decrease, down 0.8% in the New York market on forecasts calling for milder weather in the East.

Equity markets rallied, but the Standard & Poor’s 500 Index was down 1.2% at closing amid fears China is facing a cash squeeze. “The People's Bank of China refrained from using open-market operations to bolster the markets,” said analysts in the Houston office of Raymond James & Associates Inc. The Oil Service Index and the SIG Oil Exploration & Production Index were down 1.3% each.

US stock prices improved in early trading June 25 after the US Commerce Department reported businesses increased orders for manufactured goods, particularly for commercial aircraft orders. The Standard & Poor's/Case-Shiller 20-city home price index was up for the fourth consecutive month. Consumer confidence in June climbed to the highest level in more than 5 years.

Energy prices

The August contract for benchmark US sweet, light crudes rebound by $1.49 to $95.18/bbl June 24 on the New York Mercantile Exchange. The September contract regained $1.44 to $95.04/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., followed the August futures contract up $1.49 to $95.18/bbl.

Heating oil for July delivery took back 1.06¢ to $2.85/gal on NYMEX. Reformulated stock for oxygenate blending for the same month continued its retreat, however, down 2.41¢ to $2.74/gal.

The July natural gas contract dropped 3.2¢ to $3.74/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 4.9¢ to $3.82/MMbtu.

In London, the August IPE contract for North Sea Brent increased 25¢ to $101.16/bbl. Gas oil for July declined $1.75 to $856.75 /tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes lost $1.49 to $98.33/bbl.

Contact Sam Fletcher at samf@ogjonline.com

 

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