MARKET WATCH: Oil prices end 2008 above $44/bbl
Oil prices rebounded on New Year's Eve with the front-month crude gaining more than $5/bbl to settle at $44.60/bbl in light trading on the New York futures market.
Senior Staff Writer
HOUSTON, Jan. 2 -- Oil prices rebounded on New Year's Eve with the front-month crude gaining more than $5/bbl to settle at $44.60/bbl in light trading on the New York futures market.
The jump in prices on the final trading session of 2008 came as no surprise to traders who watched a year of volatile oil prices. On the New York Mercantile Exchange, oil prices peaked at about $147/bbl in July before tumbling upon a US credit crisis and a worldwide economic slump.
In December, crude oil prices on the NYMEX dipped to $33.87/bbl, marking the lowest price in more than 4 years.
Paul Horsnell of Barclays Capital noted, "Consensus is a process in which analysts try to look sensible and reliable, when reality tends not to be a sensible phenomenon and, in this decade at least, has involved shredding every single element of oil market consensus."
So far this decade, consensus by analysts has tended to overestimate supply from outside the Organization of Petroleum Exporting Countries. Analysts also were both high and low on their oil demand forecasts, he said.
"So that gives us our first forecast for 2009…that consensus is way, way, way wrong in terms of supply, demand, and price," Horsnell said. "Forecast number two is that prices will as ever both overshoot and undershoot and, as in 2008, will be driven primarily by often sharp changes in perceptions and data flow about supply and demand conditions."
In Dec. 31 trading, NYMEX crude oil prices climbed when the US government's weekly inventory report showed gasoline supplies rose less than had been expected.
On the global markets, ongoing violence in the Gaza strip raised concerns that Middle East crude oil supplies could be cut, and OAO Gazprom threatened to cut natural gas shipments to Ukraine (OGJ Online, Dec. 23, 2008).
For the week ended Dec. 26, US crude inventories rose by 500,000 bbl to 318.7 million bbl, the US Energy Information Administration reported. Gasoline inventories rose by 800,000 bbl to 208.1 million bbl.
US refineries ran at 82.5% of total capacity on average, a drop of 2.2% from the previous week. Distillate inventories rose by 700,000 bbl to 136 million bbl.
Separately in its report on US natural gas inventories in underground storage, EIA reported a withdrawal of 143 bcf to 2.88 tcf for the week ended Dec. 26. The level was above the 5-year average of 2.82 tcf but lags last year's storage level of 2.95 tcf for the same period.
The February contract for benchmark US light, sweet crudes rose $5.57/bbl to $44.60/bbl on Dec. 31 on NYMEX. The March contract climbed $5.83 to $48.59/bbl.
On the US spot market, West Texas Intermediate at Cushing, Okla., soared $5.57 to $44.60/bbl. The January contract for reformulated blend stock for oxygenate blending rose 12.29¢ to $1.008/gal on NYMEX. Heating oil for the same month climbed 11.7¢ to $1.4057/gal.
The February natural gas contract fell 23.7¢ to $5.622/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., dipped by 9.5¢ to $5.62/MMbtu.
In London, the February IPE contract for North Sea Brent crude gained $5.44 to $45.59/bbl. Gas oil for January rose $2.50 to $418.50/tonne.
The average price for OPEC's basket of 13 reference crudes rose 63¢ to $35.58/bbl on Dec. 31.
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