MARKET WATCH: NYMEX, Brent oil futures rise on Russia-Ukraine conflict

Crude oil prices rose slightly on the New York and London markets Aug. 27 as international oil traders watched what appears to be an escalating conflict between Russia and Ukraine.

News reports indicated Russian forces supported separatist forces in eastern Ukraine. The Ukraine government said Russian forces seized Novoazovsk, a coastal town, and several villages near the Russian border.

Regarding US natural gas in underground storage across the Lower 48, the Energy Information Administration estimated levels at 2.63 tcf as of Aug. 22. That represented a net increase of 75 bcf from the previous week.

Stocks were 490 bcf less than last year at this time and 518 bcf below the 5-year average of a rounded 3.15 tcf, EIA said Aug. 28 in its weekly gas storage report.

US gas futures prices settled higher on Aug. 27 and continued their upward momentum in early Aug. 28 trading upon forecasts for hot temperatures across parts of the country and also the futures-market switch to October as a new front-month contract. The September contract expired Aug. 27.

Late-summer heat is likely to prompt higher demand for air-conditioning, which means higher demand for gas-fired electricity, analysts said. Some forecasters expect above-normal temperatures across the Midwest, East, and South through the first week of September.

Energy prices

The New York Mercantile Exchange October crude oil contract edged up 2¢ on Aug. 27, closing at $93.88/bbl. The November contract was down 2¢ to $93.34/bbl.

The natural gas contract for September gained 4.6¢ to a rounded $3.96/MMbtu. On the US cash market, gas at Henry Hub, La., was up 5¢ to $3.99/MMbtu.

Heating oil for September delivery edged up 1.63¢ to a rounded $2.86/gal. Reformulated gasoline stock for oxygenate blending for September delivery dropped 1.72¢ to a rounded $2.75/gal.

The October ICE contract for Brent crude delivery rose 22¢ to $102.72/bbl. The November contract increased 22¢ to $103.48/bbl. The ICE gas oil contract for September rose 25¢ to $864.50/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was up 24¢ to $100.06/bbl on Aug. 27.

Contract Paula Dittrick at paulad@ogjonline.com.

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