Market watch: Middle East concerns continue buoying energy futures prices
By OGJ editors
HOUSTON, Apr. 22 -- Energy futures prices rose Friday, with traders reluctant to maintain short positions over the weekend in face of continued political disturbances in the Middle East.
Over the weekend, Alí Rodríguez Araque was named as the new president of Petroleos de Venezula SA (PDVSA), Venezuela's state oil company, in what was hailed as a major turn of events in an effort by newly restored President Hugo Chávez to return the country's oil operations to normal.
In February, several PDVSA executives expressed discontent with the appointment of a new board of directors. On Apr. 11, the new members of that board presented their resignations to Chávez, who said he would consult with PDVSA employees and the private sector before appointing a new board.
"Petroleos de Venezuela found itself involved in the sad developments that occurred recently," said Rodríguez, referring to the aborted takeover of the Venezuelan government by a portion of the military.
"PDVSA needs strong internal unity around what is its fundamental role, which is extracting the greatest benefit from our main resource," said Rodríguez, who also serves as secretary general of the Organization of Petroleum Exporting Countries.
The May contract for benchmark US light, sweet crudes gained 20¢ to $26.38/bbl Friday on the New York Mercantile Exchange. The June contract was up 16¢ to $26.44/bbl. Both continued climbing in after-hours electronic trading to $26.74/bbl and $26.80/bbl, respectively.
Refined petroleum products were mixed Friday. Heating oil for May delivery gained 0.33¢ to 65.91¢/gal, but unleaded gasoline for the same month dipped 0.73¢ to 80.4¢/gal. The May natural gas contract edged up 4.2¢ to $3.53/Mcf.
In London, futures prices for North Sea Brent oil firmed, consolidating above $25.50/bbl after testing but failing to break resistance at $26/bbl on the International Petroleum Exchange. The June Brent contract gained 8¢ to $25.85/bbl Friday, but analysts said a bullish report on US petroleum inventories later this week could boost that market above $26/bbl, on the common perception that US demand for gasoline is significantly ahead of the usual summer peak.
The May natural gas contract Friday lost 2.95¢ to the equivalent of $1.74/Mcf on the IPE.
The average price for the OPEC basket of seven benchmark crudes gained 15¢ Friday to $24.89/bbl. For the whole week, however, OPEC's average basket price fell 89¢ to $23.54/bbl.
So far this year, OPEC's basket price has averaged $20.70/bbl, up from an average $19.83/bbl during the first 3 months of 2002. For all of 2001, the OPEC basket price averaged $23.12/bbl.