Crude oil futures prices rose modestly on the New York market Dec. 16, which analysts attributed to the Dec. 17 start of a 2-day US Federal Reserve policy meeting, and expectations by some market observers that the meeting will end with a timetable to start tapering a major US economic stimulus program.
Many anticipate the Fed soon will begin scaling back its program of buying $85 billion/month in mortgage-backed securities and longer-term Treasury bonds. The program supports US benchmark oil prices by weakening the dollar, making crude cheaper to buy with other currencies.
Meanwhile, Brent crude rises rose more than $1/bbl on the London market Dec. 16, which analysts attributed to news reports suggesting some of Libya’s oil ports would not reopen any time soon after all. Unrest in Libya has reduced the country’s oil output to an estimated 250,000 b/d.
The head of a Libyan militia, which has shut down most of the country’s oil export terminals for months, told reporters on Dec. 15 that the ports will stay closed despite earlier negotiations to reopen them (OGJ Online, Dec. 11, 2013).
Ibrahim Jedran, leader of the militia in eastern Libya, during the weekend accused the central government of corruption, saying it has failed to meet negotiated conditions for reopening the oil export terminals.
Separately, a Citigroup spokesman believes higher US production will dampen oil prices worldwide in coming years.
Morse suggests benchmark Brent futures prices could dip below $90/bbl during the second half of the decade.
Heating oil for January delivery rose 1.45¢, settling at a rounded $2.99/gal. Reformulated gasoline stock for oxygenate blending for January delivery climbed 1.4¢ to a rounded $2.64/gal.
The January natural gas contract on NYMEX fell 7.2¢ to settle at a rounded $4.28/MMbtu. On the US spot market, the gas price at Henry Hub, La., declined 12.8¢ to a rounded $4.25/MMbtu.
In London, the January ICE contract for Brent crude oil rose $1.64¢, closing at $110.47/bbl. The ICE gas oil contract for January climbed $13.75 to settle at $931.50/tonne.
The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes closed at $106.92/bbl on Dec. 16, up 97¢.
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