Sam Fletcher
Senior Writer
HOUSTON, Aug. 14 -- Energy prices rose slightly Aug. 11 after plummeting during the previous session as airline flights returned to more normal conditions in the wake of a thwarted terrorist plot to bomb several airline flights en route from the UK to the US.
While geopolitics and the Alaska North Slope disruptions [of production from the Prudhoe Bay oil field] brought [prices for benchmark US crude] futures up by $2.70/bbl on the highs, the week closed down 41¢," said Olivier Jakob, managing director of Petromatrix GMBH, Zug, Switzerland. "The biggest story, however, was on product cracks and refinery margins which suffered very significant losses."
Jakob said: "The market had to absorb numerous bearish inputs in the second part of last week and into this weekend. These included on [Aug. 10] the restart of [production of] 180,000 b/d of Bonny Light [crude in Nigeria], a foiled bomb attack on transatlantic flights, dissipation of [a tropical] storm [in the Caribbean] and over the weekend the confirmation that only half of the 400,000 b/d Prudhoe production will be affected, and the approval by all parties of a 'cease fire' in Lebanon."
Jakob surmised: "In the global geopolitics, a truce in Lebanon is not necessarily more bearish for oil markets. Since militarily it has not been a victory against Hezbollah (to the contrary), the focus will now shift more aggressively against Syria and Iran. Also, Israel has sent many troops in Lebanon in the last 2 days; hence the ceasefire will start before they have fully taken positions. We might see less missiles flying over, but it will not take very long before we see renewed ground fighting."
Energy prices
The September contract for benchmark US light, sweet crudes regained 35¢ to $74.35/bbl Aug. 11 on the New York Mercantile Exchange. The October contract increased by 49¢ to $75.99/bbl.
On the US spot market, West Texas Intermediate crude at Cushing, Okla., was up by 35¢ to $74.36/bbl. Unleaded gasoline for September delivery jumped by 7.54¢ to $2.06/gal on NYMEX. Heating oil for the same month increased by 1.56¢ to $2.04/gal. However, the September natural gas contract dropped 26¢ to $7.27/MMbtu.
In London, the September IPE contract for North Sea Brent gained 35¢ to $75.63/bbl. The September contract for gas oil dropped $2.50 to $651.50/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes lost 60¢ to $70.34/bbl on Aug. 11. So far this year, OPEC's basket price has averaged $62.81/bbl.
Contact Sam Fletcher at [email protected].
