MARKET WATCH: Crude prices push higher
Paula Dittrick
Senior Staff Writer
HOUSTON, July 29 -- Crude oil futures contract prices rose on July 28 on news of international tensions while analysts remained concerned about weakening US oil demand because of high retail gasoline prices.
Iran's President Mahmoud Ahmadinejad announced July 26 that Tehran has increased its nuclear program despite calls from the US and other countries for a freeze on that program. He said Iran boosted the number of uranium-enriching centrifuges to 6,000 compared with earlier reports of Iran having 3,000 centrifuges.
The US sent a diplomat to meet Iran's chief negotiator at talks in Geneva over Tehran's disputed nuclear program. Iran faces three sets of United Nations Security Council sanctions over its refusal to halt uranium enrichment.
In an interview aired on US television July 28 from Tehran, Ahmadinejad said that if the US were to adopt a new approach to his country, then Iran would respond positively.
"Today, we see new behavior shown by the United States and the officials of the United States. My question is, "'Is such behavior rooted in a new approach?'" the president told NBC. "In other words, mutual respect, cooperation, and justice? Or is this approach a continuation in the confrontation with the Iranian people, but in a new guise?" he said.
Meanwhile, Nigerian militants threaten oil supplies coming out of that country. Royal Dutch Shell PLC said July 28 it declared a force majeure on Nigerian Bonny Light crude oil shipments for July, August, and September following an attack by militants on a pipeline in the Niger Delta (OGJ Online, July 27, 2008).
In the US, Secretary of Transportation Mary E. Peters released information July 28 showing steep declines in the number of miles Americans that drove in May compared with a year ago.
Peters said Americans drove 9.6 billion fewer vehicle-miles traveled (VMT) in May 2008 than in May 2007, according to the Federal Highway Administration data.
This was the largest drop in VMT for any May and marked the third-largest monthly drop in the 66 years that such data has been recorded. The month of May typically reflects increased traffic because of Memorial Day, vacations, and the beginning of summer.
Energy prices
The September contract for benchmark US light, sweet crudes gained $1.47 to $124.73/bbl July 28 on the New York Mercantile Exchange. The October contract settled at $125.29/bbl, up $1.47/bbl.
On the US spot market, West Texas Intermediate at Cushing, Okla., was up $1.48 to $124.74/bbl. Heating oil for August gained 3.91¢ to $3.56/gal on NYMEX. RBOB for the same month rose 3.77¢ to $3.07/gal.
The August natural gas contract rose to close at $9.163/MMbtu, up 7.9¢ for the day on NYMEX. On the US spot market, gas at Henry Hub, La., lost 6.5¢ to $9.255/MMbtu.
In London, the September IPE contract for North Sea Brent crude rose $1.32 to $125.84/bbl. The August gas oil contract rose $6.50 to $1,162.25/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 13 reference crudes rose 56¢ to $123.19/bbl on July 28.
Contact Paula Dittrick at [email protected].