Sam Fletcher
Senior Writer
HOUSTON, Oct. 10 -- The November crude futures price rebounded as high as $81/bbl Oct. 9 from a 4-week low the previous session on the New York market, despite speculation that the Department of Energy this week will report an increase in US oil inventories.
Release of that report by DOE's Energy Information Administration will be delayed until Oct. 11 because of the Oct. 8 Columbus Day holiday in the US.
Olivier Jakob, managing director of Petromatrix GMBH, Zug, Switzerland, said the latest trading session on the New York Mercantile Exchange showed "the same supportive action below $79/bbl that we had last week and the week before that." However, Jakob said, "We lack a convincing fundamental story to justify yesterday's move, especially as once again it is concentrated mainly on West Texas Intermediate. The continued support is a technical attempt at creating self-fulfilling conditions, but it is done in an environment which is lacking a fundamental catalyst and lacking the evidence that any significant investment flows are fueling the move. Hence, while a support is created, it has failed so far in recreating an upward trending momentum."
Nonetheless, Jakob said, "The price support on WTI left the product cracks slightly weaker while the premium of WTI to Brent increased further."
Analysts in the Houston office of Raymond James & Associates Inc. reported, "Oil prices have increased 16% over the past 7 weeks, but with refineries conducting maintenance and no remaining hurricanes in sight, oil prices may show some signs of seasonal weakness in the coming weeks."
Energy prices
The November contract for benchmark US light, sweet crudes traded as high as $81.10/bbl Oct. 9 before closing at $80.26/bbl, up $1.24 for the day on NYMEX. The December contract escalated by $1.14 to $79.54/bbl. On the US spot market, WTI at Cushing, Okla., was up $1.24 to $80.27/bbl. Heating oil for November delivery grew by 2.57¢ to $2.19/gal on NYMEX. The November contract for reformulated blend stock for oxygenate blending (RBOB) increased 2¢ to $2.02/gal.
The November natural gas contract gained 1.7¢ to $6.86/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., bumped up 5.5¢ to $6.70/MMbtu. Raymond James analysts said natural gas traded relatively flat in premarket wire transactions Oct. 10 on EIA forecasts that this winter will be 4% colder than last year but 2% warmer than the 30-year average. "Mild weather forecasts for the near term suggest continued storage builds," they said. At last report, US gas storage was 7.5% above the 5-year average at 3.3 tcf.
In London, the November IPE contract for North Sea Brent crude advanced 91¢ to $77.49/bbl. The October gas oil contract gained $5.75 to $681.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes dropped 90¢ to $74.47/bbl on Oct. 9.
Contact Sam Fletcher at [email protected].