MARKET WATCHCrude, gasoline futures prices inch up
Sam Fletcher
Senior Writer
HOUSTON, May 30 -- Crude and gasoline futures prices inched up May 26 in thin trading ahead of the long Memorial Day weekend marking the start of the US driving season.
Prices were supported by expectations of increased summer demand, refinery outages, and the threat of disruptions from political incidents and the North Atlantic hurricane season, which starts June 1.
With upcoming US elections, political rhetoric in Washington, DC, is "clearly turning hostile" towards energy companies, said J. Marshall Adkins in the Houston office of Raymond James & Associates Inc., citing a congressional committee looking at tax returns from a number of large oil producers.
"Political interference in the oil market—anywhere in the world—is not the solution to the structural imbalance between oil supply and demand," he said. "If anything, the rhetoric now coming out of Washington could potentially make the situation worse by raising concerns about the political and fiscal risk of petroleum investments in the US, similar to the kind of concerns that are causing oil production in countries like Russia and Venezuela to stagnate."
Energy prices
The July contract for benchmark US light, sweet crudes crept up by 5¢ to $71.37/bbl May 26 on the New York Mercantile Exchange. The August contract increased by 7¢ to $72.16/bbl. Gasoline for June delivery gained 3.24¢ to $2.14/gal on NYMEX. But heating oil for the same month lost 1.37¢ to $1.98/gal.
The new front-month natural gas contract, for July, inched up by 4¢ to $6.15/MMbtu in a shortened NYMEX session ahead of the Memorial Day weekend. NYMEX was closed May 29 for the holiday.
In London, the July IPE contract for North Sea Brent crude lost 12¢ to $70.59/bbl. However, the June gas oil contract escalated by $12.25 to $631.25/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes increased by 2¢ to $65.12/bbl on May 29. So far this year, OPEC's basket price has averaged $60/37/bbl, up from an average $50.64/bbl for all of 2005.
Contact Sam Fletcher at [email protected].