MARKET WATCH: Crude futures price rebounds slightly in New York
Prices for crude and petroleum products registered a small rebound Nov. 7, but front-month crude on the New York market still ended the week down 10%, or $6.77/bbl.
HOUSTON, Nov. 10 -- Prices for crude and petroleum products registered a small rebound Nov. 7, but front-month crude on the New York market still ended the week down 10%, or $6.77/bbl.
Before the New York market opened Nov. 7, the US Department of Labor reported that the US economy lost 240,000 jobs in October—the 10th consecutive month of cuts. The loss exceeded analysts' expectations of a 200,000-job loss. The unemployment rate jumped to 6.5% from 6.1% in September, surpassing Wall Street expectations of a 6.3% drop. That is the highest unemployment rate in more than 14 years. So far this year, the US has lost 1.2 million jobs (OGJ Online, Nov. 7, 2008).
Following that report, the US dollar index fell in late trading to 85.359 from 86.280 against a trade-weighted basket of six currencies.
"West Texas Intermediate managed last week what it could not the previous week, and that is to finish the week close enough to $60/bbl to have a better chance to test that support the following week," said Olivier Jakob at Petromatrix, Zug, Switzerland. He said, "WTI lost $6.77/bbl during the week, while Brent was down $7.97/bbl. RBOB gasoline was down $6.15/bbl, but heating oil lost only $4.44/bbl. Natural gas was about unchanged. WTI is now $35/bbl lower than a year ago and $86/bbl lower than the summer peak."
In the Houston office of Raymond James & Associates Inc. analysts said Nov. 10, "Oil is on the rise this morning following the Group of 20's annual meeting where discussions on how member nations could ease the crisis and improve international financial regulation took place. The meeting was comprised of finance ministers and central bank officials representing 90% of the global economy, including Brazil, Russia, India, and China. China went a step further by launching a large $600 billion stimulus package over the weekend, indicating that other nations would follow suit with programs to encourage growth. The news, coupled with statements from Iran that the Organization of Petroleum Exporting Countries would cut oil output even further, is driving oil 6% higher premarket. Natural gas is up a similar amount premarket."
The G-20 group includes Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the UK, the US, and the European Union.
The December contract for benchmark US light, sweet crudes traded at $59.97-62.82 before closing at $61.04/bbl, up 27¢ for the day on the New York Mercantile Exchange. The dip below $60/bbl may have signaled to some traders that oil might be oversold at those levels, analysts said. The January contract gained 40¢ to $61.87/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 27¢ to $61.04/bbl. Heating oil for December regained 3.6¢ to $1.98/gal on NYMEX. The December contract for reformulated blend stock for oxygenate blending (RBOB) increased 1.35¢ to $1.35/gal.
The December natural gas contract dropped 22.2¢ to $6.76/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., lost 25.5¢ to $6.62/MMbtu.
In London, the December IPE contract for North Sea Brent slipped 8¢ to $57.35/bbl. The November contract for gas oil rebounded $6.50 to $625/tonne.
The average price for OPEC's basket of 13 benchmark crudes fell $1.40 to $53.49/bbl Nov. 7. So far this year, OPEC's basket price has averaged $102.92/bbl.
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