Light, sweet crude oil prices soared by more than $2/bbl on the New York market Jan. 22, settling at $32.19 for March delivery while Brent crude oil prices climbed by nearly $3/bbl on the London market to settle at $32.18/bbl.
Analysts attributed the jump in US oil futures to a blizzard forecast for the East Coast. Meanwhile, cold weather swept across much of the Southeast, Mid-Atlantic, and Northwest. Dropping temperatures across much of the nation drove up heating oil prices by nearly 10¢/gal.
Both light, sweet crude and Brent crude contracts posted their biggest single-day percentage gains since August 2015. US oil futures were up 9% for the day while the Brent crude future price rose 10% Jan. 22 from the previous day. The gains came after oil prices tumbled more than 50% during the past 18 months.
Goldman Sachs Group Inc. said crude prices are at a price level that is apt to create “real fundamental change” in oil markets. Analysts Jeffrey Currie, Damien Courvalin, Michael Hinds, and Abhisek Banerjee wrote a note to clients saying industry adjustment is crucial.
“We continue to believe this transitional inflection phase is likely to last beyond first-half 2016 and will be characterized by a trendless market with substantial price volatility, potentially between the two stress points of $20/bbl and $40/bbl,” they said.
Energy prices
The March crude oil contract on the New York Mercantile Exchange gained $2.66 to settle at $32.19/bbl on Feb. 22,the the highest close for the front-month contract since Jan. 8. The March contract was up $2.68 to settle at $33.51/bbl.
The NYMEX natural gas contract for February edged up a fraction of a penny to remain at a rounded $2.14/MMbtu. The Henry Hub gas price held at $2.20/MMbtu on Jan. 22, unchanged from the previous trading day.
Heating oil for February delivery gained nearly 10¢ to a rounded $1/gal. The price for reformulated gasoline stock for oxygenates blending for February was up 5¢ to a rounded $1.08/gal.
The March ICE contract for Brent crude climbed $2.93 to settle at $32.18/bbl on Jan. 22, and the April contract rose $3.05 to $32.84/bbl. The ICE gas oil contract was $284/tonne on Jan. 22, up $25.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Jan. 22 was $25.50/bbl, up $2.61.
Contact Paula Dittrick at [email protected].
Paula Dittrick | Senior Staff Writer
Paula Dittrick has covered oil and gas from Houston for more than 20 years. Starting in May 2007, she developed a health, safety, and environment beat for Oil & Gas Journal. Dittrick is familiar with the industry’s financial aspects. She also monitors issues associated with carbon sequestration and renewable energy.
Dittrick joined OGJ in February 2001. Previously, she worked for Dow Jones and United Press International. She began writing about oil and gas as UPI’s West Texas bureau chief during the 1980s. She earned a Bachelor’s of Science degree in journalism from the University of Nebraska in 1974.