MARKET WATCHMarket closing jitters push up energy futures prices

Energy futures prices jumped higher Thursday with the unexpected announcement that the New York Mercantile Exchange and most other US markets would be closed Friday for a national day of morning following the death of former US President Ronald Reagan.

June 11, 2004

2 min read

By OGJ editors

HOUSTON, June 11 -- Energy futures prices jumped higher Thursday with the unexpected announcement that the New York Mercantile Exchange and most other US markets would be closed Friday for a national day of morning following the death of former US President Ronald Reagan.

The International Petroleum Exchange in London was scheduled for only morning operations Friday.

Those moves triggered buying among traders who feared a terrorist attack over the long weekend, possibly at Reagan's funeral service Friday where President George W. Bush was scheduled to deliver a eulogy. The last long break in market sessions for the May 31 Memorial Day holiday in the US witnessed terrorist attacks on oil firms and westerners in Saudi Arabia that drove prices to record highs when markets reopened.

The energy futures markets also were stimulated Thursday when the International Energy Agency in Paris increased its forecast for growth in world oil demand by almost 360,000 b/d to 2.3 million b/d for 2004. IEA also revised its demand forecast for crude supplied by the Organization of Petroleum Exporting Countries up by 500,000 b/d for this year. It marked the second consecutive month that IEA has increased its demand forecast.

However, IEA officials again warned that recent global economic growth is not sustainable with crude prices near $40/bbl.

Energy prices
The July and August contracts for benchmark US light, sweet crudes Thursday jumped by 91¢ each to $38.45/bbl and $38.65/bbl, respectively, on NYMEX. On the US spot crude market, West Texas Intermediate at Cushing, Okla., gained 90¢ to $38.45/bbl.

Heating oil for July delivery escalated by 2.33¢ to $1.004/gal Thursday on NYMEX. Gasoline for the same month was up by 2.08¢ to $1.1881/gal. The July natural gas contract gained 9.4¢ to $6.18/Mcf.

On IPE in London, the July contract for North Sea Brent crude gained 45¢ to $35.74/bbl Thursday. Gas oil for June delivery was unchanged at $314.50/tonne. The July natural gas contract dipped by 2.6¢ to the equivalent of $3.85/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes increased by 68¢ to $34.59/bbl Thursday.