Sam Fletcher
OGJ Senior Writer
HOUSTON, July 20 -- After falling for three sessions, crude prices rebounded slightly July 19 in the New York market, pulled along by an equity market advance on a positive earnings outlook.
“Additionally, the flow of risk-capital back into the crude market has provided further support to prices,” said Anuj Sharma, research analyst at Pritchard Capital Partners LLC in Houston. “According to the [US] Commodity Futures Trading Commission, net long positions in crude rose by 67% on the New York Mercantile Exchange in the week ending July 13.” The August crude contract expires July 20 “with the September contract currently trading only 36¢ above it,” he said.
The front-month natural gas NYMEX contract inched down less than 1¢ despite projections of a hotter-than-normal summer continuing over the coming days. “Oversupply concerns are weighing on natural gas, limiting sharp appreciation in prices despite increased cooling demand. Stronger earnings posted by Halliburton on higher onshore activity further added to market apprehensions that onshore supplies will continue to expand in the near future,” Sharma said. However, he said, “Weather continues to be the silver lining as temperatures this week are expected to remain above the normal levels in the East.”
In other news, the International Energy Agency in Paris reported China has taken over the US’ century-long position as world's largest consumer of energy. According to IEA data, in 2009 China consumed 2.25 billion tons of oil equivalent, which includes all forms of energy consumed, compared to 2.17 billion tons for the US. The US remains the largest energy consumer on a per-capita basis and the biggest oil consumer, however.
Nevertheless, analysts in the Houston office of Raymond James & Associates Inc. reported, “It is the dawn of a new age.” A decade ago China's energy consumption was only half that of the US. “In recent years, China's insatiable demand for energy to fuel its economy has often experienced double-digit growth, supporting global oil and LNG prices along the way. China was not expected to surpass the US in energy use for another 5 years, but the impact of the global recession on US demand was severe,” said Raymond James analysts.
Meanwhile, the US Department of Commerce reported construction of new homes and apartments fell 5% in June to a seasonally adjusted annual rate of 549,000—the lowest level since October. May's figure was revised downward to 578,000. Officials blamed the weak economy.
Energy prices
The August contract for benchmark US sweet, light crudes climbed 53¢ to $76.54/bbl July 19 on NYMEX. The September contract regained 52¢ to $76.90/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 53¢ to $76.54/bbl. Heating oil for August delivery inched up 0.57¢ to $2.02/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month increased 1.04¢ to $2.06/gal.
The August contract for natural gas lost 0.9¢ to $4.51/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., dropped 6.5¢ to $4.57/MMbtu.
In London, the September IPE contract for North Sea Brent gained 25¢ to $75.62/bbl. Gas oil for August advanced $10 to $648.50/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was up 5¢ to $72.94/bbl.
Contact Sam Fletcher at [email protected].
