By OGJ editors
HOUSTON, Nov. 17 -- Reported problems with a refinery, a gasoline terminal, and a pipeline helped push up gasoline futures prices Friday, pulling other energy commodities along with it.
Continued fear that terrorist attacks might yet disrupt oil supplies from the Middle East is keeping energy markets strong, analysts said. That fear amplifies every bullish indicator, they said, pushing prices higher.
Prices jump
Gasoline for December delivery jumped by 2.25¢ to 89.16¢/gal Friday on the New York Mercantile Exchange. Heating oil for the same month escalated by 1.52¢ to 87.97¢/gal.
Benchmark US light, sweet crudes gained 47¢ to $32.37/bbl Friday on NYMEX. That contract hit the highest price level in a month during the previous trading session on news that Shell Oil Products US, a division of Shell Oil Co., plans to close its 65,000 b/d Bakersfield, Calif., refinery by next October (OGJ Online, Nov. 14, 2003). The January contract for benchmark US oil increased by 35¢ to $31.78/bbl Friday. On the spot cash market, West Texas Intermediate at Cushing, Okla., was up 45¢ to $32.38/bbl.
The December natural gas contract shot up by 31.5¢ to $5.11/Mcf Friday on NYMEX. "It all started when crude oil futures broke some technical levels, sending the natural gas market to a lot of buy stops right above $5[/Mcf] as the colder forecast spooked the shorts [traders with an excess of open sales vs. purchases to cover those sales] ahead of the weekend," said analysts Monday at Enerfax Daily.
"Some private forecasters are calling for another cold snap in the 11-15-day outlook, or by late November," they said. "The market was vulnerable to a covering rally, and when the forecast turned colder, the large net-short position of [speculative] funds drove it higher, as predicted."
In London, the January contract for North Sea Brent oil increased by 26¢ to $29.56/bbl Friday on the International Petroleum Exchange. Gas oil for December delivery was up by $7.25 to $266.75/tonne. The December natural gas contract gained 7.4¢ to the equivalent of $5.38/Mcf Friday on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes advanced by 32¢ to $29.26/bbl Friday. For all of last week, however, OPEC's basket price averaged $28.61/bbl, up by $1.31 from the previous week.
So far this year, OPEC's basket price has averaged $27.91/bbl, up significantly from an average price of $24.36/bbl for all of 2002.
