Sam Fletcher
OGJ Senior Writer
HOUSTON, Mar. 9 -- Crude prices continued climbing, up less than 1%, and natural gas prices continued falling, down more than 1% Mar. 8 in the New York market.
“The strength for crude came after France gave verbal commitments to help debt-laden Greece and after reports of ethnic violence in Nigeria continue to threaten the country's crude output. Energy stocks traded relatively flat after the marginal decline in the broader markets,” said analysts in the Houston office of Raymond James & Associates Inc.
In New Orleans, analysts at Pritchard Capital Partners LLC said, “Crude oil rose to a 2-month high on technicals and light volumes with little news and a flat dollar. Crude traded range-bound yesterday and could be establishing a new trading range, indicating traders are comfortable with crude oil at these levels. With fundamentals still weak, this week’s inventory report will be key in determining if crude can remain elevated over $80/bbl.”
The government report on US inventories of crude and petroleum products for the week ended Mar. 5 is scheduled for release Mar. 10. The price of crude was down in early trading Mar. 9 in anticipation of a large increase in oil inventories and a rebound in the US dollar.
Olivier Jakob at Petromatrix, Zug, Switzerland, said, “Gasoline has been driving the oil complex for the last few days and will be the commodity to watch for the next 2 days since the crack should favor higher refinery production while large speculators are holding close to record net length in it. If the statistics do not come out on the positive side for gasoline, there will be a risk for rapid profit-taking on the crack.”
Pritchard Capital Partners said, “With warmer temperatures across the country, natural gas fell yesterday with spring weather firmly in traders’ minds. Based on customer-weighted heating-degree days, winter-to-date (Nov. 1 through Mar. 5) is 89% complete and was 4% colder than normal. Temperatures last week were 2% colder than normal but 4% warmer than last year and 5% warmer than the prior week.”
There’s no indication yet that the escalation of violence in Nigeria in a conflict between local Muslims and Christians has yet had any effect on the country’s oil industry, but crude production declined by 85,000 b/d to 1.94 million b/d in February with renewed attacks by militants on industry facilities. The Movement for the Emancipation of the Niger Delta earlier called off a 3-month cease-fire.
However, Bloomberg News Survey reported Angola increased production 75,000 b/d to 1.9 million b/d in the same month.
On a separate note, Deutsche Bank AG is launching a new exchange-traded commodity “to allow investors ‘an easy way to gain exposure to crude oil,’” said Jakob. He said, “We expect that more of the index instruments will transition towards IntercontinentalExchange [North Sea] Brent over the next 12 months as the Commodity Futures Trading Commission tries to impose stricter position limits on US futures [trading of benchmark US crude].”
Energy prices
The April contract for benchmark US sweet, light crudes increased 37¢ to $81.87/bbl on the New York Mercantile Exchange. The May contract gained 39¢ to $82.31/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 37¢ to $81.87/bbl. Heating oil for April delivery inched up 0.81¢ to $2.11/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month advanced 1.82¢ to $2.29/gal.
The April natural gas contract dropped 6.6¢ to $4.53/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., fell 11¢ to $4.48/MMbtu.
In London, the April IPE contract for North Sea Brent crude gained 58¢ to $80.47/bbl. Gas oil for March lost $2.25 to $649.25/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes increased 59¢ to $77.86/bbl.
Contact Sam Fletcher at [email protected].
Rystad Energy.
