MARKET WATCH:Crude price rebounds above $90/bbl
Crude futures prices rebounded above $90/bbl Dec. 6 after the US government outlined a mortgage aid plan that might relieve strains on the economy.
HOUSTON, Dec. 7 -- Crude futures prices rebounded above $90/bbl Dec. 6 after the US government outlined a mortgage aid plan that might relieve strains on the economy.
"After several days of losses, the bullish broader market news combined with technical trading to help lift crude prices," said analysts in the Houston office of Raymond James & Associates.
The crude futures market "had a strong rally on a combination of readjustment of relative values and bottom picking," said Olivier Jakob, managing director of Petromatrix GMBH, Zug, Switzerland. "West Texas Intermediate moved from a discount of $1/bbl to [North Sea] Brent back to par, and most of the Brent-WTI correction preceded the flat price resurrection, as it induced a stronger momentum on WTI charts. The gasoline crack and the gasoline-to-heating-oil differential also improved during the day."
However, Raymond James analysts discerned a bearish note; "Asian fuel prices have increased by 66% this year, resulting in Asian power plants shifting away from oil to natural gas," they said.
The January contract for benchmark US light, sweet crudes jumped by $2.74 to $90.23/bbl Dec. 6 on the New York Mercantile Exchange. The February contract gained $2.65 to $89.94/bbl. On the US spot market, WTI at Cushing, Okla., was up $2.74 to $90.24/bbl. The January contract for reformulated blend stock for oxygenate blending escalated 8.43¢ to $2.30/gal on NYMEX. Heating oil for the same month rose 5.57¢ to $2.55/gal.
The January natural gas contract climbed 14.5¢ to $7.33/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., jumped by 23.5¢ to $7.30/MMbtu.
In London, the January IPE contract for North Sea Brent crude rose $1.69 to $90.18/bbl. However, the December gas oil contract fell $8 to $787.50/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes lost $1.02 to $84.48/bbl on Dec. 6.
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