Sam Fletcher
Senior Writer
HOUSTON, Oct. 17 -- November crude futures rose, briefly touching $60/bbl Oct. 16 in New York, while gas prices surged higher by nearly 14%, wiping out last week's losses, on expectations of more cold weather and a production cut by the Organization of Petroleum Exporting Countries.
Crude prices continued climbing to $60.25/bbl in overnight electronic trading after the regular trading session closed on the New York Mercantile Exchange, rebounding from a 10-month low of $57.22/bbl on Oct. 12.
"As the market rises to record highs, energy investors are awaiting confirmation along with the details of the OPEC supply cut that has been rumored over the past month," said analysts in the Houston office of Raymond James & Associates Inc. OPEC ministers said they would discuss a proposed production cut of 1 million b/d at their Oct. 19 meeting.
Current demand for heating is projected to be 32% above normal in the Northeast US, where Buffalo, NY, is still digging out of a record 2 ft of snow that knocked out electrical power to 250,000 residents Oct. 13.
With temperatures from the Midwest to the Northeast calculated at 16% colder last week, analysts said heating oil inventories likely were reduced significantly.
Meanwhile, as much as 10 in. of rain flooded Houston-Galveston and other parts of the Texas Gulf Coast on Oct. 16. The resulting runoff likely will overrun many rivers and bayous along the Texas Gulf Coast, temporarily hampering oil and gas drilling and production in some places.
Energy prices
The November contract for benchmark US sweet, light crudes jumped by $1.37 to a closing price of $59.94/bbl Oct. 16 on NYMEX. The December contract increased by $1.27 to $61.57/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by $1.01 to $59.59/bbl. Heating oil for November delivery gained 3.87¢ to $1.76/gal on NYMEX. Unleaded gasoline for the same month increased 2.33¢ to $1.49/gal.
The November natural gas contract soared by 78.5¢ to $6.44/MMbtu, wiping out the 76.5¢ loss it accumulated during the previous week.
In London, the November IPE contract for North Sea Brent crude gained 44¢ to $59.96/bbl. However, the November gas oil contract lost $3 to $547/tonne.
The average price for OPEC's basket of 11 benchmark crudes increased by 44¢ to $55.34/bbl on Oct. 16.
Contact Sam Fletcher at [email protected].
