MARKET WATCHOil futures prices rise in New York on worries about terrorism

Crude oil futures prices rose in New York Tuesday amid concerns about terrorism, and the expiration of the June contract as the current month contract also had its traditional volatility effect, traders said.

May 21, 2003

2 min read

By OGJ editors

HOUSTON, May 20 -- Crude oil futures prices rose in New York Tuesday amid concerns about terrorism, and the expiration of the June contract as the current month contract also had its traditional volatility effect, traders said.

The White House raised the US terrorist alert level to orange, the second highest level of alert in the five-step alert system. The move was prompted by suicide bombings across the Middle East. Saudi Arabia Ambassador to Washington, Prince Bandar bin Sultan, suggested that the suicide bombers who hit Riyadh could be planning a bigger operation.

The US and UK temporarily closed their embassies and consulates in Saudi Arabia because of "imminent" terror threats. Saudi and US officials said they had intelligence that Osama bin Laden's Al-Qaeda group might attack the US or US interests overseas.

Traders Wednesday awaited the release of weekly inventory data. Expectations about crude stocks were mixed. Four of five analysts polled by Dow Jones Newswires forecast an average decline of 1.5 million bbl in crude stocks for the week ended May 16.

Market prices
The June contract for benchmark US light, sweet crudes jumped 45¢ to $29.28/bbl Tuesday on the New York Mercantile Exchange, while the July contract rose by 12¢ to $28.41/bbl.

Refined petroleum product closed mixed. Unleaded gasoline for June delivery slipped by 0.37¢ to 85.02¢/gal. Heating oil for the same month rose 0.39¢ to 73.31¢/gal. The June natural gas contract gained 4.1¢ to $6.056/Mcf Tuesday on NYMEX.

"The (natural gas) market is jittery, hesitant on where it should be assessing value. With bullish inventory concerns, and bearish short-term weather and already high prices, the market seems to be in a wait-and-see situation," analysts at Enerfax Daily said.

In London, the June contract for North Sea Brent oil settled up 4¢ to $25.65/bbl Tuesday on the International Petroleum Exchange. The day's high was $25.85/bbl and the low was $25.30/bbl.

The June natural gas contract jumped by 4¢ to the equivalent of $2.96/Mcf on IPE.

The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes dropped 43¢ to $26.10/bbl Tuesday.