MARKET WATCH: Energy prices rebound on stabilizing US stock market
Energy prices rebounded Aug. 23 on the New York Mercantile Exchange from sharp losses in previous days.
By OGJ editors
HOUSTON, Aug. 24 -- Energy prices rebounded Aug. 23 on the New York Mercantile Exchange from sharp losses in previous days. Analysts attributed rising prices to a stabilizing stock market, which reduced concerns about an economic slowdown.
Energy markets had fallen recently despite Hurricane Dean making landfall twice in Mexico because many investors believed that credit might be tightening so much as to stifle US economic growth.
Some analysts mentioned lingering concerns about weakening oil demand in coming weeks because the summer peak driving season is winding down and because weather forecasts indicate a mild winter for the Northern Hemisphere.
Following Hurricane Dean, Mexico's state-owned Petroleos Mexicanos on Aug. 24 reopened two of its three main oil exporting ports in the southern Gulf of Mexico. Pemex previously said 10.5 million bbl of crude in storage would resume shipping when the ports reopened.
Pemex reported minimal rig damage, saying it expects to reach prehurricane levels of oil production by next week. More than 18,000 workers were evacuated ahead of the storm, and they were expected to return to work in the Bay of Campeche Aug. 24.
The NYMEX light, sweet crude oil contract for October delivery on Aug. 23 rose 57¢ to close at $69.83/bbl. The November contract rose 53¢ to close at $69.56. On the US spot market, WTI at Cushing rose 72¢ to $70.04/bbl.
In other NYMEX trading, heating oil for September delivery rose 1.27¢ to $1.9610/gal. The September contract for reformulated blend stock for oxygenate blending (RBOB) increased 3.42¢ to $1.923/gal.
The September natural gas contract traded lower for most of the Aug. 23 NYMEX trading session but jumped just before the close, ending at $5.62/MMbtu or 4.4¢ higher than the previous day. The September gas contract reached an 11-month low of $5.58/MMbtu on Aug. 22.
On Aug. 23, the Energy Information Administration reported the injection of 23 bcf of natural gas into US underground storage for the week ended Aug. 17. US gas storage exceeds 2.9 tcf (OGJ Online, Aug. 23, 2007). In US spot trading, gas at Henry Hub, La., lost 10.5¢ to $5.81/MMbtu.
On the London market, the October IPE contract for North Sea Brent crude rose $1.16 to settle at $69.86/bbl.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 reference crudes climbed 42¢ to $67.00/bbl on Aug. 23.