Market watch: A mix of causes pushes up oil, gas futures prices

Energy futures prices surged Monday, with benchmark US crudes again topping $30/bbl on the New York Mercantile Exchange.

Oct 15th, 2002

By OGJ editors

HOUSTON, Oct. 15 -- Energy futures prices surged Monday, with benchmark US crudes again topping $30/bbl on the New York Mercantile Exchange.

Analysts credited several events for that rise, including market reaction to weekend terrorist attacks in Bali. A rise in gasoline prices and reports that the chill of an early fall over the weekend had sent gas utilities to the natural gas spot market for supplies also influenced traders, who worried that another tropical depression now forming in the Caribbean might brew another hurricane that could threaten US oil and gas production in the Gulf of Mexico.

The November contract for US sweet, light crudes jumped 66¢ to $30.03/bbl Monday on NYMEX. The December contract shot up 54¢ to $29.27/bbl. Unleaded gasoline for November delivery surged by 2.95¢ to 84.96¢/gal. Heating oil for the same month was up 1.92¢ to 80.89¢/gal.

The November natural gas contract increased by 15.7¢ to $4.30/Mcf on NYMEX. It marked the first time since June 2001 that the near-month gas futures price had pushed into that price range, analysts at Enerfax Daily reported Tuesday. "The market opened up and quickly rallied higher before dropping back somewhat in afternoon trading. The upswing was undergirded by forecasts of an early cold winter," they said.

The National Weather Service's most recent forecast calls for below-normal temperatures over most of the nation through most of October.

"Most end-users will not pull volumes from storage in October, but fill needs from the spot market. Yesterday's settlement above key resistance at $4.25(/Mcf) could bring more speculative, technical buying today. As of Friday, almost 1 bcf (of Gulf of Mexico gas production) was still shut in from Hurricane Lili," the analysts reported.

In London, the November contract for North Sea Brent oil gained 51¢ to $28.50/bbl on the International Petroleum Exchange. Brokers said IPE oil prices would likely remain at current levels, while the market watched developments in the Middle East and players held long positions against the possibility of a conflict in the region.

The November natural gas contract soared by 23.3¢ to $3.51/Mcf on IPE.

The Organization of Petroleum Exporting Countries' basket of seven benchmark crudes increased by 38¢ to $28.16/bbl Monday.

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