Energy futures prices shot up in trading on the New York Mercantile Exchange (NYMEX) Monday as it looked less likely that oil producers will boost output later this month. Traders noted that prices were again rising on a wide range of news reports suggesting that the Organization of Petroleum Exporting Countries (OPEC) would be carefully reviewing world oil demand at its June 21 meeting in Vienna.
"We expect OPEC to have a very thorough meeting this time, and this is creating some concern about the group raising its wellhead production in a measured way to keep prices in favor of sellers," said a trading source at a major oil company.
The source also noted the higher petroleum demand in the US, which has been pushing prices to new highs. A clearer trend will only be seen after the OPEC meeting.
On Monday, West Texas Intermediate, the American benchmark crude, surged $1.54 to settle at $31.74/bbl for July delivery, while the August contract stood at $30.43, up by $1.17.
Natural gas at Henry Hub settled at $4.212 MMbtu for July delivery, and the August contract settled at $4.198.
Refined petroleum products also closed higher, with July home heating oil putting on 3.64� to finish at 77.87�/gal, while unleaded gasoline for the same month rose by 2.58� to end at $1.0440/gal.
In after-hours electronic access trading in New York today, WTI was fetching $31.74/bbl for the July position and $30.52 for the August contract.
Meanwhile, in London Monday, North Sea Brent crude oil futures settled sharply higher on the International Petroleum Exchange (IPE). IPE July Brent closed at $31.21/bbl, up by $1.63 from the previous close, while the August contract stood at $29.33, a gain of $1.25.
Brokers said a move downwards to allow for profit-taking and for unfilled gaps in trading charts to be filled was inevitable, but the market remained very strong fundamentally and technically. They said that unless oil producers boosted production by more than 1 million b/d in the third quarter, Brent prices were likely to continue at around $30/bbl.
The July IPE natural gas contract closed at the equivalent of $2.53/MMbtu, down 5�.
The forward July contract for North Sea Brent crude oil kept up its high swing on the Singapore Exchange today. Traders said the price jumped by $1.57 to close at $31.15/bbl, keeping up the hefty surge in prices recorded in New York and London on Monday.
In line with the all-time high for July Brent, Singapore August Brent shot up by $1.19 today to finish at $29.27/bbl.
The price of the OPEC basket of seven crudes stood at $29.72/bbl Monday, compared with $28.61 the previous Friday, according to OPEC Secretariat calculations. The basket price edged up to $28.23/bbl last week, compared with $28.22 in the last week of May.
According to figures released by the OPEC secretariat, the basket price so far this year up to June 8 has averaged $25.83/bbl. In May, the basket price averaged $26.94/bbl, as opposed to $22.93 in April and $26.71 in March.
For the first quarter of 2000, the basket price averaged $26.11/bbl, as against $23.42 in the fourth quarter of 1999. For 1999 as a whole, the price of the basket averaged $17.47/bbl, compared with $12.28 the previous year.
