Market watch: Oil energy futures rally as Venezuela's Chávez returns
By OGJ editors
HOUSTON, Apr. 16 -- Oil futures prices rallied sharply Monday following the return of President Hugo Chávez to power in Venezuela, easing concerns among traders and analysts that the country would boost its oil output.
Chávez had resigned under military pressure early Friday, and a transitional government was named for what proved to be less than 48 hr. Chávez is known for helping the Organization of Petroleum Exporting Countries achieve unity in its production quotas.
"This is bullish short-term news," said Tyler Dann, analyst with Banc of America Securities LLC. "Middle East tension and continued compliance with OPEC production agreements by Venezuela will likely keep the speculators in a long position in the short run and oil prices above supply-demand fundamentals, which are closer to $21/bbl."
The May contract for benchmark US sweet, light crudes on Monday rose by $1.10/bbl to $24.57/bbl on the New York Mercantile Exchange, while the June contract climbed by $1.11 to $24.80/bbl. Both positions retreated in after-hours electronic trading, to $24.47/bbl and $24.71/bbl, respectively.
Heating oil for May delivery gained 3.29¢ to 63.34¢/gal during the regular NYMEX session Monday. Unleaded gasoline for the same month jumped by 5.67¢ to 78.63¢/gal. The May natural gas contract surged by 30.5¢ to $3.43/Mcf.
In London on Monday, North Sea Brent prices rose on the International Petroleum Exchange. The June Brent contract gained 90¢ to $24.06/bbl, while the July contract also rose by 90¢ to $23.86/bbl.
The May natural gas contract rose by 3¢ to the equivalent of $1.75/Mcf on the IPE.
The average price for the OPEC basket of seven crudes rose 72¢ to $22.96/bbl Monday.