Market watch: Venezuelan oil workers' strike drives up oil futures prices

Oil futures prices rose Wednesday as the market weighed the impact of Venezuela's oil workers' strike, which disrupted petroleum supplies for another day. Traders are trying to calculate the impact of the strike along with Iraq's 30-day embargo of its oil exports.

April 11, 2002

2 min read

By OGJ editors
HOUSTON, Apr. 11 -- Oil futures prices rose Wednesday as the market weighed the impact of Venezuela's oil workers' strike, which disrupted petroleum supplies for another day.

Traders are trying to calculate the impact of the strike upon petroleum supplies combined with the impact of Iraq's 30-day embargo of its oil exports. That embargo came in response to Israel's continued military incursion into the Palestinian territories following another wave of suicide bombings targeting Israelis.

Meanwhile, reports on US weekly petroleum inventories had little impact on the market because of conflicting estimates, traders said. The American Petroleum Institute, which issued its report after trading ended Tuesday, said oil stocks increased by 4.3 million bbl last week. But the Department of Energy, which issued its report before trading started Wednesday, estimated that crude stocks declined by 10,000 bbl during that period.

In addition, API said gasoline inventories declined by 10,000 bbl, while DOE reported a rise of 1.1 million bbl.

The May contract for benchmark US sweet, light crudes rose 31¢ to $26.13/bbl Wednesday on the New York Mercantile Exchange, while the June contract was up 27¢ to $26.30/bbl. Both positions retreated slightly in after-hours electronic trading, to $25.97/bbl and $26.24/bbl, respectively.

Heating oil for May delivery rose by 0.04¢ to 67.84¢/gal during the regular NYMEX session Wednesday. Unleaded gasoline for the same month gained 0.05¢ to 83.44¢/gal. The May natural gas contract was down by 1.7¢ to $3.18/Mcf.

Near-term forecasts suggest mild temperatures through the balance of April, said Ronald Barone, analyst with UBS Warburg LLC. "After rising for 9 consecutive weeks, spot prices head south," he said of natural gas prices.

The National Weather Service's 6-10 day forecast calls for above-normal temperatures throughout most of the US, with normal to below-normal temperatures expected in the Northwest.

In London, North Sea Brent prices fell on the International Petroleum Exchange. The May Brent contract dropped 7¢ to $26.01/bbl. The April natural gas contract dipped 7¢ to the equivalent of $1.78/Mcf on the IPE.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes rose by 1¢ to $24.26/bbl Wednesday.