By OGJ editors
HOUSTON, Feb. 1 -- Energy prices rebounded Jan. 31 after ministers of the Organization of Petroleum Exporting Countries temporarily suspended the $22-28/bbl target price band for crude that they instituted in 2000, pending further study.
That sent a signal to traders that OPEC is comfortable that current high oil prices are sustainable. The ministers also agreed on Jan. 30 in Vienna to maintain production at 27 million b/d for the 10 members other than Iraq. OPEC ministers said they would continue to monitor and to discuss crude markets prior to their next scheduled meeting Mar. 16 in Iran.
The March contract for benchmark US light, sweet crudes hit a 2-week low of $46.01/bbl before rebounding to close at $48.20/bbl, up $1.02 for the Jan. 31 session on the New York Mercantile Exchange. The April contract gained $1.01 to $48.45/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by $1.02 to $48.21/bbl. The expiring February gasoline contract regained 0.95¢ to $1.32/gal, but February heating oil—also expiring—lost 0.72¢ to $1.33/gal.
The March natural gas contract gained 6.2¢ to close at $6.32/MMbtu on NYMEX. Earlier in that session, it was down to $6.12/MMbtu because of a softer spot market price and forecasts for moderate weather this week. But a sharp late rebound in crude oil futures prices created a buying spree among traders with excess gas sales contracts, said analysts at Enerfax Daily.
In London, the March contract for North Sea Brent crude gained 97¢ to $45.92/bbl on the International Petroleum Exchange.
The average price for OPEC's basket of seven benchmark crudes lost 93¢ to $40.95/bbl on Jan. 31