MARKET WATCHCrude futures price continues climbing
The front-month contract for benchmark US crudes continued to climb, topping $92/bbl in regular trading Oct. 26 on the New York Mercantile Exchange.
HOUSTON, Oct. 29 -- The front-month contract for benchmark US crudes continued to climb, topping $92/bbl in regular trading Oct. 26 on the New York Mercantile Exchange.
Moreover, analysts in the Houston office of Raymond James & Associates Inc. said Oct. 29, "Crude again set an all-time high in after-hours trading and surpassed $93/bbl for the first time this weekend." They cited several factors affecting the rise of oil prices, including:
-- Storms in the Gulf of Mexico that forced Petroloeos Mexicanos, Mexico's state-run oil company, to shut in 600,000 b/d of offshore production, one fifth of Mexico's total oil output.
-- Increased military tensions between Turkey and Kurdish rebels in Iraq. "Although there was no full land incursion, Turkish air forces hit targets in northern Iraq," the analysts reported.
-- The US dollar hit record lows against the euro as investors anticipated that the US Federal Reserve will cut interest rates at its next meeting.
-- Ministers of the Organization of Petroleum Exporting Countries have disregarded calls from various sources to increase production. Instead, OPEC blames geopolitical issues for driving up prices.
The December crude contract for US light, sweet crudes climbed as high as $92.22/bbl during the regular NYMEX trading session Oct. 26 before closing at a record high of $91.86/bbl, up $1.40 for the day. The January contract gained $1.50 to $90.74/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up $1.10 to $91.87/bbl. Heating oil for November delivery gained 2.41¢ to $2.43/galon NYMEX. The November contract for reformulated blendstock for oxygenate blending (RBOB) escalated 3.82¢ to $2.28/gal.
The November natural gas contract increased 3¢ to $7.22/MMbtu and will expire at the end of the Oct.29 trading session on NYMEX. "Prices continue to trade higher, in large part due to record crude prices, even as we approach full [US gas] storage levels of 3.5 tcf," Raymond James analysts said.
In London, the December IPE contract for North Sea Brent crude gained $1.21 to $88.69/bbl. Gas oil for November was up $14.75 to $757/tonne.
The average price for OPEC's basket of 12 benchmark crudes gained 13¢ to $84.80/bbl on Oct. 26. So far this year, OPEC's basket price has averaged $65.12/bbl vs. $61.08/bbl for all of 2006.
Contact Sam Fletcher at firstname.lastname@example.org.