Energy futures prices continued their strong rise in trading Tuesday on the New York Mercantile Exchange (NYMEX), amid speculation about what action, if any, the Organization of Petroleum Exporting Countries will take at its June 21 meeting.
Continuing uncertainty helped boost oil prices, sources said. Brokers said that prices remained high because the market is doubtful OPEC will agree to a high enough hike to its current output ceiling to shave more than a couple of dollars per barrel from current prices.
Iran has indicated it will opposed a production increase, while Saudi Arabia has held its cards close. Previously, Saudi Arabia's oil minister said the country recognizes a need to keep supply and demand in relative balance.
OPEC president and Venezuelan Energy and Mines Minister Ali Rodriguez Araque was quoted as saying OPEC does not intend to tweak production levels in response to seasonal changes in oil prices. He blamed the present surge in prices on seasonal demand in the US. Indonesian Mines and Energy Minister Lt. Gen. Susilo Bambang Yudhoyono also indicated a lack of eagerness to raise production.
Speaking in Calgary at the World Petroleum Congress, OPEC Sec. Gen. Rilwanu Lukman reiterated that $30/bbl is high but that $10/bbl is too low. He blamed rising prices on heavy taxation imposed on petroleum products by major consuming countries.
On Tuesday, NYMEX crude rose 82� to finish at $32.56/bbl for July delivery, the highest near-month close since March 7, when oil finished the day at $34.13.The August contract stood at $31.20 dollars, up 77�.
Refined petroleum products also followed the market up, with July home heating oil rising 0.64� to settle at 78.51�/gal. Unleaded gasoline continued its climb with the July contract closing at $1.06, up 1.82�.
The price of the OPEC basket of seven crudes stood at $29.97/bbl Tuesday, compared with $29.72/bbl the previous day.
NYMEX natural gas for July delivery declined by 5.4� to end at $4.16/MMbtu.
In after-hours electronic access trading in New York today, crude was fetching $32.50/bbl for July and $31.12 for the August contract, both down from the NYMEX close.
In Singapore, the price of North Sea Brent crude surged further, ending at a high of $31.49/bbl for the July contract. Traders said the market was still uncertain, and mixed statements from producers continued to push prices to new levels.
They said it was not very clear why prices are climbing, but they were crossing "certain dangerously expensive" levels for oil-importing countries.
The Singapore Brent crude August contract gained 58� to finish at $29.85.
Meanwhile, in London Tuesday, North Sea Brent crude oil futures closed higher again on the International Petroleum Exchange (IPE). July Brent settled at $31.49/bbl, up 28� from the previous close. The day's high was $31.70/bbl, and the low, $30.90.
On the IPE, the July natural gas contract closed Tuesday at the equivalent of $2.56, up 2�.
July gasoil also ended higher at $238/tonne, up $4/tonne from Monday's settlement. The day's high was
$239.50/tonne, with $240/tonne beginning to appear as an achievable target. The daily low was $234/tonne.
