Sam Fletcher
Senior Writer
HOUSTON, Aug. 9 -- Crude futures prices jumped to a new high above $63/bbl on Aug. 8 after the US closed its embassy and consulates in Saudi Arabia amid warnings of possible terrorist attacks in that country.
Officials reported Aug. 7 that they had uncovered a security threat against US government buildings in Saudi Arabia. Traders feared that terrorists might also target Saudi oil facilities. Saudi Arabia is the only member of the Organization of Petroleum Exporting Countries that still has spare capacity to produce additional crude if current supplies are disrupted or otherwise outstripped by demand.
Meanwhile, rebels renewed attacks on oil pipelines in eastern India.
Traders also were concerned about recent mishaps that have triggered unplanned shutdowns at several US refineries. A fire was reported over the weekend at a unit of Sunoco Inc.'s 330,000 b/d refinery in Philadelphia.
Valero Energy Corp. officials said Aug. 8 that they expected to lose 50,000 b/d of gasoline production during repair of damage to its 175,000 b/d McKee refinery in the Texas panhandle, the result of a Aug. 5 fire that was extinguished immediately by refinery personnel. A fluid catalytic cracking unit along with methyl tertiary butyl ether and tertiary amyl ether units is down, said officials who estimated that repairs would take 5 days.
Energy prices
The September contract for benchmark US sweet, light crudes jumped to a new intraday high of $64/bbl on Aug. 8 before closing at a record $63.94/bbl, up by $1.63 for the session on the New York Mercantile Exchange. The October contract gained $1.62 to $64.90/bbl. The November and December contracts both traded above $65/bbl, while the first 4 months of 2006 all topped $66/bbl, prompting expectations among some analysts that the near-month crude contract may soon hit the $65/bbl mark on NYMEX. On the US spot market, West Texas Intermediate at Cushing, Okla., increased to $63.95/bbl on Aug. 8 from $62.32/bbl in the previous session.
Gasoline for September delivery gained 2.48¢ to a new high of $1.86/gal on NYMEX. Heating oil for the same month escalated by 5.82¢ to $1.79/gal. However, the September natural gas contract dipped by 1.6¢ to $8.68/MMbtu in profit taking. "A firm [natural gas] cash market and a rapidly shrinking storage surplus are likely to keep potential sellers sidelined until the summer winds down," said analysts at Enerfax Daily.
In London, the September contract for North Sea Brent crude gained $1.63 to $62.70/bbl on the International Petroleum Exchange. The August contract for gas oil was up by $27 to $558.50/tonne.
The average price for OPEC's basket of 11 benchmark crudes advanced by $1.28 to $56.57/bbl on Aug. 8.
Contact Sam Fletcher at [email protected]
