Sam Fletcher
Senior Writer
HOUSTON, Oct. 12 -- Crude futures Monday registered a fifth consecutive record-popping closing price, with the November contract for benchmark US crudes finishing at $53.64/bbl, up 33¢ for the day on the New York Mercantile Exchange after trading at a new peak of $53.80/bbl during that session.
That crude contract proceeded to push past the $54/bbl barrier, trading at $54.45/bbl early Tuesday on NYMEX, said analysts at Raymond James & Associates Inc., St. Petersburg, Fla.
Energy prices were driven by threats of a labor strike in Nigeria that by Thursday could curtail that country's oil production; escalation of an ongoing strike by Norwegian offshore workers; and continued delays in bringing oil and gas production back online in the Gulf of Mexico after last month's hurricane.
In Norway, "the ongoing rig workers' strike is expected to widen today, likely resulting in the shut-in of 55,000 b/d," said Raymond James analysts Tuesday. "The government is unlikely to intervene as it did last summer because the workers are being careful not to threaten a nationwide production shutdown."
In Nigeria, they said, "The unions that began a general strike yesterday are vowing to continue it through Thursday. While there are no oil export disruptions so far, the market is worried that if the unions and the government don't reach an agreement on fuel prices, a more prolonged strike will be almost certain. In addition, there is the lingering threat of violence in the Niger Delta, which accounts for most of the country's oil production."
The US Minerals Management Service said Tuesday that 471,328 b/d of oil production and 1.7 bcf of natural gas production in the Gulf of Mexico were still shut in. That amounts to 27.73% of normal daily crude and 13.87% of normal daily gas production in the gulf. And that's not counting production lost from five of the seven offshore platforms that were destroyed by Hurricane Ivan, said MMS officials.
"A substantial amount of the deferred production is directly attributable to damage that has occurred along pipeline routes, rather than actual structural damage to the producing platforms," MMS officials reported Friday. They said 12 large-diameter pipelines, 10 inches or larger, were damaged in federal waters. "Pipelines in mud-slide areas off the mouth of the Mississippi River experienced failures and will take a significant effort to locate and repair because the pipelines are buried by as much as 20-30 feet of mud," they said. The industry is still assessing underwater damage through the use of divers and remotely operated vehicles, they said.
The December crude contract gained 40¢ to $53.34/bbl Monday on NYMEX. On the US spot market, West Texas Intermediate crude increased by 33¢ to $53.65/bbl. Heating oil for November delivery increased by 1.67¢ to a record $1.47/gal on NYMEX, but gasoline for the same month dipped by 0.7¢ to $1.41/gal. The November natural gas contract fell by 17¢ to $6.99/Mcf, "pressured by profit-taking [and] fairly mild weather forecasts for this week with the front months weighed down by near-full storage inventories. Physical [spot market] gas prices at the Henry Hub[, La.,] are running at a steep $1.40[/Mcf] discount to the front-month contract, at or near historical highs," said analysts Tuesday at Enerfax Daily.
In London, the November contract for North Sea Brent crude was up by 95¢ to $50.66/bbl Monday on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes jumped by 85¢ to $46.04/bbl Monday.
Friday prices
The Oil & Gas Journal was closed Monday for the Columbus Day holiday in the US. However, industry resources reported crude futures prices continued a record-setting trend Friday, with the November contract closing at $53.31/bbl on NYMEX, up 64¢ for the day after hitting a new peak of $53.40/bbl during that trading session. Markets were plagued by fears of the threatened strike in Nigeria. Also, a storm halted offloading operations at the Louisiana Offshore Oil Port, a major intake point for crude imports and some Gulf of Mexico production.
The December crude contract gained 70¢ to $52.94/bbl Friday on NYMEX. Spot market WTI increased by 64¢ to $53.32/bbl. Heating oil for November delivery was up 2.31¢ to $1.45/gal. Gasoline for the same month gained 1.01¢ to $1.41/gal. The November natural gas contract increased by 9.2¢ to $7.16/Mcf.
OPEC's basket price increased by 11¢ to $45.19/bbl on Friday.
Contact Sam Fletcher at [email protected]
