MARKET WATCHCrude, gasoline hit new price highs on NYMEX

Futures prices for crude and gasoline continued to set new record highs Friday on the New York Mercantile Exchange, with markets still afraid of possible disruptions of crude supplies from the Middle East.

May 17, 2004

2 min read

By OGJ editors

HOUSTON, May -- Futures prices for crude and gasoline continued to set new record highs Friday on the New York Mercantile Exchange, with markets still afraid of possible disruptions of crude supplies from the Middle East.

Abdullah Bin Hamad Al Attiyah, Qatar's energy minister, said Friday that crude prices currently are inflated by about $8/bbl because of "geopolitical reasons."

The Emirates Center for Strategic Studies and Research, an UAE think-tank, recently proclaimed that the Organization of Petroleum Exporting Countries is "innocent" of the recent record spike in crude prices. "The current skyrocket of oil prices is not motivated directly by OPEC policy, ECSSR reported. "Hence, collective action from both sides [consumers and producers] is needed to stabilize both the market and prices."

Meanwhile, OPEC members continue consultations over Saudi Arabia's proposal to increase the group's production quota by 1.5 million b/d to 25 million b/d. However, Hossein Kazempour Ardebili, the governor representing Iran at OPEC, said no decision is expected prior to the group's scheduled meeting June 3 in Beirut. But even if OPEC were to raise its quota, it would only formalize the group's part of the group's current overproduction, which exceeds 1.5 million b/d, he said.

Energy prices
The June and July contracts for benchmark US light, sweet crudes each gained 30¢ to $41.38/bbl and $41.30/bbl, respectively, on NYMEX. On the US spot market, West Texas Intermediate at Cushing, Okla., also increased by 30¢ to $41.38/bbl.

Gasoline for June delivery gained 0.96¢ to $1.4101/gal Friday on NYMEX. However, heating oil for the same month dipped by 0.78¢ to $1.0409/gal. The June natural gas contract lost 7.9¢ to $6.40/Mcf Friday, "with front months pressured by some pre-weekend profit taking after a 3-day, 5% rally, although higher crude oil prices helped limit the losses," analysts said Monday at Enerfax Daily.

In London, the July contract for North Sea Brent oil increased by 27¢ to $38.26/bbl Friday on the International Petroleum Exchange. Gas oil for June delivery rose by $6 to $327.75/tonne. However, the June natural gas contract lost 3.6¢ to the equivalent of $3.76/Mcf on IPE.

The average price for OPEC's basket of seven benchmark crudes gained 74¢ to $37.67/bbl Friday. So far this year, OPEC's basket price has averaged $31.59/bbl, well outside of its targeted price of $22-28/bbl.