By OGJ editors
HOUSTON, Apr. 7 -- Oil futures prices sustained levels above $67/bbl Apr. 6 in New York markets "given supply tightness and strong gasoline inventory draws in recent weeks," said J. Marshall Adkins, analyst with Raymond James & Associates Inc.
Market jitters Apr. 6 might have been caused by diminished hope that Nigerian oil production would be back online soon. Adkins, in a recent report, warned markets not to count on a full rebound once production does come back on line.
Royal Dutch Shell PLC is looking into reviewing the status of its shut-in 120,000 b/d Nigerian EA oil field, Adkins said, noting, "looking into reviewing is far from restarting." Shell and other operators have shut in several Nigerian fields because of sabotage and political unrest.
Meanwhile, natural gas futures prices fell despite updated 2006 hurricane forecasts released this week by Colorado State University's Philip Klotzbach and Wiliam Gray calling for a very active 2006 season with 17 named storms.
Of the 17, nine are predicted to develop into hurricanes and five into intense hurricanes, the forecasters said. The probability of at least one major hurricane making landfall in the US is 81%, they added.
Energy prices
The New York Mercantile Exchange contract for benchmark US light, sweet crudes for May delivery climbed 87¢ to close at $67.94/bbl Apr. 6. The June contract rose by 70¢ to $69.06/bbl. On the US spot market, West Texas Intermediate rose 87¢ to $67.95/bbl.
Gasoline futures for May delivery on NYMEX reached $1.9999/gal Apr. 6, up 5.28¢. For June delivery, gasoline was up 3.2¢ to $1.9653/gal.
Natural gas futures for May delivery on NYMEX fell 9.7¢ Apr. 6 to settle at $6.972/MMbtu, "following a dismal [Energy Information Administration] storage report and expectations of lackluster demand due to warming temperatures," said UBS Securities LLC analyst Ronald J. Barone (OGJ Online, Apr. 6, 2006). "Technical indicators for the contract remain mixed with key resistance at $7.25[/MMbtu] and key support at $6.93[/MMbtu]," Barone said.
Analysts at Enerfax Daily said gas prices "have been pulled up by high oil prices, speculation about a hot summer, and active hurricane season and down by the huge oversupply in storage." In the near term, weather forecasts across most of the US are mild, which will cut demand, they added.
Heating oil for May delivery gained 2.19¢ to $1.8907/gal. The June contract reached $1.9035/gal, up 2.3¢.
In London, the May IPE contract for North Sea Brent crude reached $67.84, up 74¢. Gas oil for April reached $586.50/tonne, up $2.25.
The average price for OPEC's basket of 11 benchmark crudes reached $62.13/bbl Apr. 6, up $1.05.
