Sam Fletcher
Senior Writer
HOUSTON, Apr. 25 -- From a low-point of $49.66/bbl on Apr. 18, near-month futures prices for benchmark US light, sweet crudes rebounded by more than 11% through Apr. 22 on the New York Mercantile Exchange, the biggest rally in 3 months, according to reports by Bloomberg LP.
Last week's rally was driven by market concerns that US gasoline demand will outpace supplies this summer. Those fears were aggravated by recent refinery outages in Texas, Louisiana, and Venezuela.
The June contract for benchmark US crudes jumped by $1.19 to $55.39/bbl Apr. 22 on NYMEX, while the July contract gained 99¢ to $56.54/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., shot up by $2.29 to $54.40/bbl. Gasoline for May delivery spiked by 3.23¢ to $1.65/gal Apr. 22 on NYMEX, up by 11% in the biggest weekly increase for a near-month contract since September 2003, according to Bloomberg. Heating oil for the same month increased by 1.11¢ to $1.55/gal.
The May natural gas contract was up by 16.3¢ to $7.20/MMbtu Apr. 22 on NYMEX, pulled higher by the gasoline-driven rally. That contract will expire Apr. 27.
"There was no fundamental change in the outlook for natural gas. The storage surplus is expected to expand to well over 300 bcf vs. the 5-year average in this week's report [by the Energy Information Administration on Apr. 27], an ostensibly bearish factor," said analysts at Enerfax Daily. "The supply-demand imbalance has shifted higher to where it is favoring supply by about 1 bcfd. Storage levels could recover to 3.3 tcf by Nov. 1 even with a warm summer and a gradual erosion back to a flat supply-demand balance by July," they said.
"The wild card remains the severity of the [2005] hurricane season," Enerfax analysts said.
In London, the June contract for North Sea Brent crude increased by 96¢ to $54.97/bbl Apr. 22 on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries basket of seven benchmark crudes gained $1.36 to $50.61/bbl on Apr. 22. So far this year, OPEC's basket price has averaged $45.12/bbl vs. $36.05/bbl for all of 2004.
Contact Sam Fletcher at [email protected]
