Sam Fletcher
Senior Writer
HOUSTON, May 10 -- Energy prices continued to rally with the near-month futures price for benchmark US crude closing above $52/bbl May 9 for the first time in nearly 2 weeks.
The rise followed speculation that the Organization of Petroleum Exporting Countries is already pouring so much crude into world markets that it may have trouble meeting a seasonal increase in demand in the last quarter of this year.
"OPEC is at its highest production in history," said Qatari Oil Minister Abdullah bin Hamad Al Attiyah in a May 9 interview reported by Dow Jones Newswires. "I am concerned about that. If demand is raised in the fourth quarter as usual, then we will be in a tight position."
Other OPEC officials said the group, excluding Iraq, is currently producing 29.7 million b/d and would maintain that production through June. Outside sources put OPEC's production, including Iraq, even closer to 30 million b/d.
Energy prices
The June contract for US sweet, light crudes escalated by $1.07 to $52.03/bbl May 9 on the New York Mercantile Exchange. The July contract increased by 71¢ to $53.38/bbl. On the US spot market, West Texas Intermediate was up by $1.07 to $52.04/bbl. Gasoline for June delivery gained 1.13¢ to $1.49/gal on NYMEX, while heating oil for the same month climbed by 0.91¢ to $1.44/gal.
The June natural gas contract increased by 5.3¢ to $6.67/MMbtu, "despite a softer cash [spot] market and milder weather this week," said analysts at Enerfax Daily. "Milder weather this week could slow demand and weigh on both cash and futures [markets]," they said.
In London, the June contract for North Sea Brent crude gained 52¢ to $51.29/bbl on the International Petroleum Exchange.
The average price for OPEC's basket of seven benchmark crudes lost 10¢ to $47.82/bbl on May 9.
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