MARKET WATCH: Energy prices rise as Gaza conflict escalates

Crude futures prices rose again Jan. 5 as the conflict in Gaza continues to escalate, said analysts with Raymond James & Associates Inc.

By OGJ editors
HOUSTON, Jan. 6 -- Crude futures prices rose again Jan. 5 as the conflict in Gaza continues to escalate, said analysts with Raymond James & Associates Inc.

Also boosting oil prices, analysts said, was news that Kuwait, the Organization of Petroleum Exporting Countries' third largest producer, and Qatar are set to implement their previously announced OPEC supply cuts.

"We believe that even if OPEC is 50% compliant with the aggregate 4.2 million b/d cut 'on paper,' thereby reducing production by 2 million b/d in 2009, the oil market will likely be rebalanced," Raymond James analysts said.

Forecasts for colder temperatures in the US Midwest and Northeast helped boost natural gas prices as well.

The February futures contract for benchmark US light, sweet crudes rose $2.47/bbl to $48.81/bbl on Jan. 5 on the New York Mercantile Exchange. The March contract climbed $2.48 to $52.69/bbl.

On the US spot market, West Texas Intermediate at Cushing, Okla., rose $2.47 to $48.81/bbl. The January contract for reformulated blend stock for oxygenate blending rose 7.l9¢ to $1.18/gal on NYMEX. Heating oil for the same month climbed 9.6¢ to $1.576/gal.

The February natural gas contract rose 10.1¢ to $6.072/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., rose 40¢ to $5.835/MMbtu.

In London, the February IPE contract for North Sea Brent crude gained $2.71 to $49.62/bbl. Gas oil for January rose by $51 to $478.75/tonne.

At presstime, the average price for OPEC's basket of 12 reference crudes for Jan. 5 was unavailable.

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