HOUSTON, Jan. 31 -- Energy prices continued to climb Jan. 30 amid concerns that political problems in Iran and Nigeria may disrupt crude supplies.
The five permanent members of the United Nations Security Council agreed to report Iran to the council when it meets in an emergency session Feb. 2. That could mean the end of diplomatic efforts to get Iran to abandon its nuclear program. The International Atomic Energy Agency, the UN's nuclear watchdog, is to meet Feb. 2-3.
Meanwhile, militants released four hostages—a Briton, an American, a Bulgarian, and a Honduran—kidnapped earlier from a Royal Dutch Shell PLC oil platform off Nigeria.
Shell has partially restarted its 115,000 b/d EA oil field, but there apparently are no plans yet to repair the damaged onshore pipeline that has shut in 106,000 b/d of Shell's production in Nigeria. Militants have threatened to continue attacks on international companies' oil facilities in an attempt to reduce Nigeria's oil exports by 30% in February.
OPEC holds production
As expected, ministers of the Organization of Petroleum Exporting Countries decided at their Jan. 31 meeting in Vienna to maintain the oil production quota of 28 million b/d adopted last June for the 10 affected members. Iraq is not included in the quota since it's still struggling to regain its prewar production levels. The group will meet again Mar. 8 in Vienna to review market conditions.
OPEC ministers said market fundamentals have remained in balance since their December meeting and noted that the world economy remains resilient to higher oil prices. Ministers said the recent hike in energy prices is primarily the result of refining bottlenecks and other nonfundamental factors. They also said supply and demand forecasts in recent years generally have underestimated world requirements for OPEC oil, especially in the second quarter.
The March contract for benchmark US sweet, light crudes gained 59¢ to $68.39/bbl Jan. 30 on the New York Mercantile Exchange. The April contract advanced by 58¢ to $69.10/bbl. Gasoline for February delivery increased by 3.85¢ to $1.77/gal on NYMEX. Heating oil for the same month was up by 2.69¢ to $1.87/gal. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by 59¢ to $68.36/bbl.
The March natural gas contract jumped by 88.2¢ to $9.39/MMbtu, the highest level for a front-month gas contract in nearly 3 weeks. The gas market strengthened on forecasts of below-normal temperatures on the East Cost within 2 weeks, said analysts at Enerfax Daily.
In London, the March contract for North Sea Brent crude increased by 35¢ to $66.59/bbl on the International Petroleum Exchange. Gas oil for February gained $3.50 to $558/tonne.
The average price for OPEC's basket of 11 benchmark crudes was up by 17¢ to $60.39/bbl on Jan. 30.
Contact Sam Fletcher at [email protected].