Sam Fletcher
Senior Writer
HOUSTON, Feb. 29 -- Crude prices soared to new highs, touching $103.05/bbl in after-hours electronic exchanges in New York, as investors turned to commodities as the US dollar plummeted to its lowest exchange rate against the euro since the European currency began trading in January 1999.
"Another drop of the dollar index; another price surge across most of the commodity spectrum," said Olivier Jakob at Petromatrix, Zug, Switzerland. "Crude oil made it to new record highs, but the daily gains on oil commodities were only in line with the gains in most other commodity sectors."
Jakob said, "The commodity markets are clearly under a dollar overdrive, making the call of the top [price] a difficult task. We do not know where the bottom is for the dollar index, but we know that the fall in the gasoline crack can not continue at the current pace. We will very soon come to a point where complex refiners will either move back to voluntarily cutting runs or keep their system on maintenance for a longer period, which in turn will accelerate the building of crude oil stocks as the backwardation on crude oil is relatively shallow."
In Houston, analysts with Raymond James & Associates Inc., said, "Given recent bearish inventory builds and the withdrawal of Turkish troops from Iraq, some weakness from current prices wouldn't be a shocker (OGJ Online, Feb. 26, 2008)."
Meanwhile in Ecuador, a mudslide ruptured that country's primary pipeline for the export of crude. That pipeline usually carries 360,000 b/d, primarily for Petroecuador. However, officials said they would shift some of that crude to an adjacent privately owned pipeline that follows a similar route. That pipeline has a capacity of 400,000 b/d and usually carries 150,000 b/d.
Energy prices
On Feb. 28, the April contract for benchmark US light, sweet crudes shot up to a record $102.97/bbl in intraday trading on the floor of the New York Mercantile Exchange before settling at a record closing of $102.59/bbl, up $2.95 for the day. The May contract jumped $2.87 to $102.25/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up $2.95 to $102.60/bbl. Heating oil for March delivery escalated by 7.45¢ to $2.85/gal on NYMEX. The March contract for reformulated blend stock for oxygenate blending (RBOB) advanced 1.8¢ to $2.50/gal.
The April natural gas contract shot up 38.3¢ to $9.44/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., dropped 9.5¢ to $9.11/MMbtu.
In London, the April IPE contract for North Sea Brent crude rose $2.63 to $100.90/bbl. Gas oil for March was up $13.75 to $907.50/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes dipped by 21¢ to $94.99/bbl on Feb. 28.
Contact Sam Fletcher at [email protected].
