By OGJ editors
HOUSTON, Jan. 9 -- The crude oil futures price closed above $64/bbl in New York on Jan. 6, the highest close for a near-term contract since October. Natural gas futures rebounded on Jan. 6 from their lowest level since August.
Some analysts attributed rising oil prices to political instability in the Middle East along with concerns about the health of Israeli Prime Minister Ariel Sharon, who suffered a major stroke on Jan. 4. On Jan. 9, doctors told Reuters that Sharon was still connected to respirators but that he had begun breathing on his own, which was a sign of brain activity after his induced coma to assess brain damage. Israeli media reported that Sharon had moved in his hospital bed.
Meanwhile, an Organization of Petroleum Exporting Countries spokesman said demand is strong so OPEC probably will not cut oil production quotas when the group meets at the end of this month,
Mohammed Barkindo, OPEC's new acting secretary-general, told a Gulf Times reporter on Jan. 6 in Nigeria that "it is not likely" that the group will reduce quotas. "You can see what prices are doing now," he said. "What would be the need to cut production?"
Algeria's Energy and Mines Minister Chakib Khelil made similar comments during a state radio program on Jan. 8, Reuters reported. Khelil said he believed OPEC would not cut output because prices are stable and demand is still strong.
Energy prices
The February contract for benchmark US light, sweet crudes rose $1.42 to $64.21/bbl Jan. 6 on the New York Mercantile Exchange. The March contract gained $1.38 to $64.97/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by $1.42 to $64.22/bbl.
The February natural gas contract closed at $9.632/MMbtu Jan. 6, up 13.3¢. "This price has plunged 39% from the $15.78 all-time high reached on Dec. 13," Enerfax Daily analysts said, adding that the Jan. 6 gas settlement price was the first rise in a week.
On Jan. 5, the February gas contract closed at $9.50/MMbtu, down 69.8¢. In less than a month, the price for the front-month natural gas contract plunged from a high of $15.78/MMbtu on Dec. 13 to the lowest price level since Aug. 19, 2005 (OGJ Online, Jan. 5, 2006).
Heating oil for February delivery rose 1.25¢ on Jan. 6 to $1.8006/gal on NYMEX, while gasoline for the same month climbed by 2.85¢ to $1.8155/gal.
In London, the February contact for North Sea Brent crude gained $1.59 to $62.41/bbl on the International Petroleum Exchange. However, gas oil for January delivery was up by $2.25 to $538.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes increased by 17¢ to $56.78/bbl on Jan. 6.
