Supply disruptions may be the only thing bolstering oil prices, according to a recent research report from Raymond James & Associates Inc.
“There is no sugar coating it: our original 2013 [West Texas Intermediate] forecast of $65/bbl was nowhere near the actual full-year average of $98/bbl,” Raymond James analysts said in a Jan. 6 Energy Stat report. “Likewise, we thought Brent would average $85[/bb.] vs. the actual average of $109[/bbl],” they said.
Clearly, they said, Middle East and Northern Africa oil supply disruptions, like those occurring in Libya, Iran, Syria, and South Sudan “kept a lot of oil off the market and the fear premium at sky-high levels,” Raymond James analysts noted.
“Since we admittedly find it impossible to model the timing and magnitude of these disruptions,” they said, “our 2014 view on oil prices renames fundamentally bearish. Simply put, assuming no additional disruptions, we think global oil supply will grow about twice as fast as demand.”
Energy prices
The New York Mercantile Exchange February crude contract was down $1.48 on Jan. 3, closing at $93.96/bbl. The March contract also dropped $1.48 to settle at $94.14/bbl.
Heating oil for February delivery lost 4.73¢ to a rounded $2.94/gal. Reformulated gasoline stock for oxygenate blending for February delivery fell 4.62¢ to a rounded $2.65/gal.
The February natural gas contract on NYMEX declined 1.7¢, settling at a rounded $4.30/MMbtu. On the US spot market, the Jan. 3 gas price at Henry Hub, La., gained 2¢ to $4.34/MMbtu.
In London, the February ICE contract for Brent crude oil fell 89¢ to close at $106.89/bbl. The March ICE contract for Brent lost $1.06, settling at $106.54/bbl. The ICE gas oil contract for January declined $13.25 to settle at $910.25/tonne.
The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes remained at $106.92/bbl, as no price was reported for Jan. 3.
