Market watch: Middle East tension pulls up oil prices

Energy futures prices rose on international markets Wednesday as increased tension in the Middle East overshadowed bearish reports of higher US oil inventories by the American Petroleum Institute and the US Department of Energy.

Feb. 14, 2002

2 min read

By the OGJ Online Staff

HOUSTON, Feb. 14 -- Energy futures prices rose on international markets Wednesday as increased tensions in the Middle East overshadowed bearish reports of higher US oil inventories by the American Petroleum Institute and the US Department of Energy.

The markets also were boosted by indications that members of the Organization of Petroleum Exporting Countries are adhering closely to lower production quotas, analysts said.

The March contract for benchmark US sweet, light crudes gained 45¢ to $21.18/bbl on the New York Mercantile Exchange, where the April contract also was up 40¢ to $21.52/bbl. The March price continued rising to $21.75/bbl in after-hours electronic trading, while the April position was unchanged.

Home heating oil for March delivery surged forward 0.80¢ to 55.4¢/gal during regular trading on the NYMEX. Unleaded gasoline for the same month gained 0.71¢ to 60.9¢/gal. However, the March contract for natural gas dropped 6¢ to $2.25/Mcf.

The American Gas Association said Wednesday that natural gas withdrawals from US underground storage totaled 156 bcf last week, up from 82 bcf the previous week and 95 bcf for the same period last year. That was well above Wall Street's consensus projections.

However, US gas storage now totals more than 2 tcf, or 98% higher than a year ago, said Robert Morris of Salomon Smith Barney Inc. That represents a year-over-year surplus in excess of 1 tcf of gas "with more than two-thirds of a typical winter's heating degree days now behind us," he said in a weekly gas report issued late Wednesday.

The National Climate Data Center last week said this winter so far has been the warmest on record.

In London, the March contract for North Sea Brent crude closed at $20.70/bbl, up 24¢ for the day after trading in a range of $20.28-$21/bbl on the International Petroleum Exchange. The March natural gas contract dipped 2.9¢ to the equivalent of $2.65/Mcf on the IPE.

The average price for OPEC's basket of seven benchmark crudes gained 20¢ Wednesday to $19.25/bbl.