Sam Fletcher
Senior Writer
HOUSTON, Feb. 25 -- Crude prices rebounded Feb. 22 as Turkey launched its first major ground incursion in nearly a decade against Kurdish rebel bases in Iraq.
According to conflicting local reports, 2,000-10,000 Turkish troops with air support penetrated 2-6 miles into northern Iraq to attack rebel Kurdish camps in an area some 60 miles from the border town of Cizre, Turkey. Turkish troops were careful to avoid conflict with the currently US-backed Iraqi government, but the incursion fanned fears of a possible disruption of crude oil exports from Iraq's northern oil fields to an export terminal in Turkey.
Meanwhile, Henry Okah, leader of the Movement for the Emancipation of the Niger Delta, was extradited from Angola last week to face charges in Nigeria for murder, arms dealing, oil smuggling, and other crimes. That could ignite a new round of violence by militants that would derail peace talks between the Nigerian government and the rebels.
Energy prices pulled back Feb. 21, ending a 6-session rally, when the Energy Information Administration reported US crude inventories rose 4.2 million bbl to 305.3 million bbl in the week ended Feb. 15, up from a Wall Street consensus of a 2.7 million bbl increase. Gasoline inventories gained 1.1 million bbl to 230.3 million bbl in the same week, vs. Wall Street expectations of a 500,000 bbl increase. Distillate fuel inventories fell 4.5 million bbl to 122.5 million bbl, more than the expected decline of 1.7 million bbl (OGJ Online, Feb. 21, 2008).
Natural gas prices also advanced Feb. 22 on the New York futures market on forecasts of below-normal temperatures in the Midwest. "Despite the recent surge in natural gas prices, we believe that we are steering toward a sharp sell-off in natural gas over the coming months as the year-over-year supply deficit shrinks," said analysts in the Houston office of Raymond James & Associates Inc. "While other Wall Street analysts publish bullish reports in the wake of cold weather, our bearish thesis remains intact for this summer."
Energy prices
The April contract for benchmark US light, sweet crudes pushed as high as $99.37/bb Feb. 22 before closing at $98.81/bbl, up 58¢ for the day on the New York Mercantile Exchange. The March contract gained 61¢ to $98.42/bbl. On the US spot market, West Texas Intermediate was up 52¢ to $98.91/bbl. Heating oil for March climbed 2.49¢ to $2.76/gal on NYMEX. The March contract for reformulated blend stock for oxygenate blending increased 1.17¢ to $2.53/gal.
The March natural gas contract escalated by 25.5¢ to $9.15/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell by the same amount—25.5¢—$8.64/MMbtu.
In London, the April IPE contract for North Sea Brent crude increased 77¢ to $97.01/bbl. The March gas oil contract gained $2 to $890/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes dropped $1.35 to $92.62/bbl on Feb. 22. So far this year, OPEC's basket price has averaged $88.94/bbl, up from $69.10 for all of 2007.
Contact Sam Fletcher at [email protected]
