MARKET WATCH: Crude oil future prices rise on New York market before Fed announcement

Crude oil futures prices rose on the New York market on Dec. 19 before the Federal Reserve announced that it plans next month to begin tapering its economic stimulus program, which analysts took as a sign of greater confidence that the US economy and also energy demand will grow during 2014.

Outgoing Fed Chairman Ben Bernanke told reporters that he could foresee the bond-purchase program ending by late 2014. During January, the Fed plans to reduce its purchases to $75 billion/month from $85 billion/month.

“We are hopeful the economy will continue to show progress,” and return to more normal growth patterns, Bernanke said. In addition, the Fed announced it is in no hurry to increase short-term interest rates.

Separately, the US Energy Information Administration estimated working gas in underground storage as of Dec. 13 at 3.248 tcf, a net decline of 285 bcf from the previous week. Stocks were 488 bcf less than last year at this time and below the 5-year average of 3.5 tcf, said the weekly EIA gas storage report.

Meanwhile on world oil markets, Brent crude futures prices ended up by more than $1/bbl on the London market Dec. 18 after having fluctuated throughout the trading session over uncertainty regarding when Libyan oil exports might resume from some of its eastern ports.

Energy prices

The New York Mercantile Exchange January crude contract climbed 58¢ to close at $97.80/bbl on Dec. 18. The February contract rose 59¢ to settle at $98.06/bbl.

Heating oil for January delivery jumped up 4.72¢, settling at a rounded $3.01/gal. Reformulated gasoline stock for oxygenate blending for January delivery escalated 5¢ to a rounded $2.70/gal.

The January natural gas contract on NYMEX rose declined 3.6¢ to settle at a rounded $4.25/MMbtu. On the US spot market, the gas price at Henry Hub, La., increased 4.4¢ to a rounded $4.26/MMbtu.

In London, the February ICE contract for Brent crude oil climbed $1.19, closing at $109.63/bbl. The ICE gas oil contract for January was up $9.50 to settle at $929/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes closed at $106.74/bbl on Dec. 18, up 17¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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