MARKET WATCHCrude futures price tops 7-week high
Sam Fletcher
Senior Writer
HOUSTON, July 3 -- The front-month crude futures contract closed at a 7-week high just under $74/bbl June 30 on the New York market amid concerns over possibly tight gasoline supplies with an expected record increase in driving during the Fourth of July US holiday.
US gasoline stocks fell by 1 million bbl to 212.4 million bbl during the week ended June 23 (OGJ Online, June 28, 2006). Commercial US stocks of crude dropped 3.4 million bbl to 343.7 million bbl during the same period. The switch from methyl tertiary butyl ether (MTBE) to ethanol as an oxygenate blend in reformulated gasoline kept refineries down for spring maintenance longer than normal, analysts said.
That latest report of inventories "suggests that US gasoline demand remains reassuringly robust in the face of lofty prices at the pump," said analysts July 3 in the Houston office of Raymond James & Associates Inc. "This propped up front-month crude by $2/bbl in the next 3 days. With no clear catalyst in sight today, however, we would expect crude to trend lower modestly."
Meanwhile, the US Coast Guard opened the Calcasieu Ship Channel to commercial vessels during daylight hours on June 30 for the first time since the June 19 spill of 47,000 bbl of oil at the 450,000 b/d Citgo Petroleum Corp. refinery at Lake Charles, La.
The spill occurred when oil poured over the top of crude storage tanks' walls during heavy rainstorms, cutting off traffic into and out of four area refineries (OGJ Online, June 29, 2006). More than 37,000 bbl of spilled oil had been cleaned up as of June 30, the Coast Guard said. More than 37,000 bbl of the spilled oil has been cleaned up, the Coast Guard said.
In other news, political tensions remain between Iran and the US-led coalition of the five permanent members of the United Nation's Security Council plus Germany as the Iranian foreign minister refused demands to respond before August to the incentive package offered by the group in return for Iran's postponing its uranium-enrichment program.
Energy prices
The August contract for benchmark US sweet, light crudes closed at a 7-week high of $73.93/bbl June 30, up 41¢ for the day, after trading as high as $74.15/bbl during the session, the highest intraday price for the front-month crude contract since June 5 on the New York Mercantile Exchange. The September contract gained 30¢ to $74.81/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up by 46¢ to $73.98/bbl. However, gasoline for July delivery fell by 9.27¢ to $2.20/gal on NYMEX. Heating oil for the same month lost 2.34¢ to $1.96/gal. The August natural gas contract dipped by 3.1¢ to $6.10/MMbtu.
In London, the August IPE contract for North Sea Brent crude advanced by 63¢ to $73.51/bbl. The July gas oil contract inched up by 50¢ to $643.75/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes increased by 69¢ to $67.29/bbl on June 30. So far this year, OPEC's basket price has averaged $61.21/bbl.
Contact Sam Fletcher at [email protected].