Sam Fletcher
Senior Writer
HOUSTON, Oct. 18 -- The November contract for benchmark US light, sweet crudes hit new highs Friday on the New York Mercantile Exchange after statements by Federal Reserve Chairman Alan Greenspan, aimed at reassuring the US economy, apparently backfired.
In a speech Friday to the National Italian-American Foundation, Greenspan said the US economy is less vulnerable now to surges in oil prices than in the 1970s and that recent high prices have had little adverse effect so far. However, he warned that the risk of economic trouble might grow if prices were to move materially higher.
In other news Friday, workers in Nigeria returned to their jobs after a 4-day general strike that labor leaders said was a warning to the government to roll back a recent hike in fuel prices in that country. However, the top union said the strike could resume if the government fails to act within the next 2 weeks.
Meanwhile in Norway, the head of the Federation of Oil Workers' Union said his group might expand its 4-month strike to include fixed-platforms and a bigger volume of offshore production in the Norwegian sector of the North Sea. So far, the strike over a wage dispute has been limited to mobile drilling rigs and drillships, but union leaders said Friday they will decide within 2 weeks whether to start a sympathy strike that would take out more production.
With average production of 3.2 million b/d, Norway is the world's third largest exporter of crude. However, its recent production has dropped to some 2.5 million b/d.
Energy prices
The November crude contract hit an intraday record price of $55/bbl Friday on NYMEX before pulling back to an all-time high closing of $54.93/bbl, up 17¢ for the day. On the US spot market, West Texas Intermediate at Cushing, Okla., also gained 17¢, to $54.94/bbl Friday. However, the December NYMEX contract dipped by 9¢ to $53.97/bbl. Heating oil for November delivery was unchanged at $1.55/gal, while gasoline for the same month slipped by 1.02¢ to $1.41/gal. The November natural gas contract retreated by 9.4¢ to $6.71/Mcf, brought down by "bearish technicals [trades], bulging storage pressures, and moderating weather forecasts for this week," said analysts Monday at Enerfax Daily.
In London, the November contract for North Sea Brent crude lost 16¢ to $49.93/bbl Friday on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes increased by 66¢ to $46.14/bbl Friday. For last week as a whole, OPEC's basket price averaged $45.72/bbl, up sharply from $43.94/bbl the previous week.
So far this year, OPEC's basket price has averaged $35.24/bbl, up from an average $28.10/bbl for all of 2003.
Contact Sam Fletcher at [email protected]