Sam Fletcher
Senior Writer
HOUSTON, June 24 -- Crude futures prices jumped to new highs June 23 on the New York market, temporarily hitting $60/bbl as technical trading triggered preset orders. The market also was boosted by reports of refinery outages, analysts said.
The August contract for benchmark US light, sweet crudes closed at $59.42/bbl, a record high for a near-month contract on the New York Mercantile Exchange, up by $1.33 for the day after briefly touching $60/bbl during the session. The September contract increased by $1.31 to close at $60.05/bbl after peaking at $60.60/bbl. Other monthly contracts also were up, with those through next June settling above $60/bbl. On the US spot market, West Texas Intermediate gained $1.38 to $59.23/bbl.
Heating oil for July delivery jumped by 5.3¢ to $1.68/gal on NYMEX. Gasoline for the same month gained 4.42¢ to $1.66/gal. "The oil market is being driven by products rather than crude," said analysts at the Centre for Global Energy Studies, London, in their June 20 monthly report. "Demand for middle distillates— jet fuel, diesel, and heating oil— is outstripping the ability of the refining system to produce it."
They said, "Fears that refinery capacity constraints will prevent middle distillate supply from keeping up with strong demand growth are fueling a counter-seasonal rally in distillate prices."
After falling in the three previous trading sessions, the July natural gas contract regained 3.1¢ to $7.43/MMbtu June 23 on NYMEX. Earlier gains in that session were pared following the release of the Energy Information Administration's weekly report on US storage of natural gas. EIA reported 75 bcf of natural gas injected into US underground storage during the week ended June 10. US gas storage now stands at 2.03 tcf after EIA revised down its estimated storage by 7 bcf to 1.96 tcf at the end of last week (OGJ Online, June 23, 2005)
"Many traders got long [holding near-month contacts that obligated them to take delivery] in front of the EIA number hoping for the worst, but it came in on the high end of expectations, and when Tropical Storm Arlene [that came ashore on the Gulf Coast on June 11] is factored in, [the EIA report] was bullish," said analysts at Enerfax Daily.
In London, the August contract for North Sea Brent crude escalated by $1.38 to $57.96/bbl on the International Petroleum Exchange.
The average price for the Organization of Petroleum Exporting Countries' new basket of 11 benchmark crudes increased by 35¢ to $52.69/bbl.
Contact Sam Fletcher at [email protected]