MARKET WATCHUS energy futures prices climb as dollar strengthens

April 5, 2004
Energy futures prices improved on the New York Mercantile Exchange as reports Friday of the fastest-paced job growth in 4 years strengthened the US dollar against other key foreign currencies.

By OGJ editors
HOUSTON, Apr. 5 -- Energy futures prices improved on the New York Mercantile Exchange as reports Friday of the fastest-paced job growth in 4 years strengthened the US dollar against other key foreign currencies.

Buying of energy futures also increased as major investment funds covered outstanding sales contracts ahead of the weekend. However, some analysts speculated that the market may have peaked as far as supply-demand fundamentals are concerned and might began to correct downward this week.

The May and June contracts for benchmark US light, sweet crudes increased by 12¢ each to $34.39/bbl and $33.87/bbl, respectively, on NYMEX. On the US spot market, West Texas Intermediate at Cushing, Okla., increased by 10¢ to $34.88/bbl Friday.

Heating oil for May delivery inched up by 0.81¢ to 85.83¢/gal Friday on NYMEX. However, gasoline for the same month slipped by 0.37¢ to $1.0722/gal. The May natural gas contract gained 4.7¢ to $5.81/Mcf, "on continued strength from buying by big funds, despite comfortable storage levels and fairly mild weather forecasts," said analysts Monday at Enerfax Daily.

In London, the May contract for North Sea Brent crude plunged by $1.34 to $30.21/bbl Friday on the International Petroleum Exchange. Gas oil for April delivery lost $9.50 to $268.75/tonne. The May natural gas contract declined by 0.93¢ to the equivalent of $3.52/Mcf on IPE.

The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes fell by 61¢ to $30.18/bbl Friday. The weakness of the US dollar against other currencies has undermined OPEC's purchasing power in recent years.