Market watch, Aug. 11
Energy futures prices continued their strong rise in trading on the New York Mercantile Exchange Thursday. The rally was extended from the previous session's rise, which was in turn a direct result of an American Petroleum Institute report of the lowest oil stock levels in more than 20 years.
Energy futures prices continued their strong rise in trading on the New York Mercantile Exchange Thursday. The rally was extended from the previous session's rise, which was in turn a direct result of the US inventory situation.
An American Petroleum Institute report of the lowest level of oil stocks in more than 20 years, coupled with refinery problems on the US gulf coast, provided a very strong upward move on Thursday. Most traders agreed that the precarious inventory situation in the US was the real force behind the sustained rally.
Light, sweet NYMEX crude for September delivery added 99� to settle at $31.34/bbl, while the October contract stood at $30.87, up 92�. Refined petroleum products also closed higher, with September home heating oil rising 2.74� to finish at 86.28�/gal, while unleaded gasoline for the same month jumped by 4.44� to settle at 92.64�.
NYMEX natural gas for September delivery advanced 4.9� to end at $4.47/Mcf.
In after-hours electronic access trading in New York, NYMEX crude was fetching $31.20/bbl for the September position and $30.69 for the October contract, both down from the NYMEX close.
Meanwhile, on the International Petroleum Exchange in London Thursday, North Sea Brent crude oil futures surged to break resistance at $31/bbl for the September contract towards the close of trading. Brokers said a bullish market had accelerated the rally seen earlier in the day with a combination of technical and speculative buying.
IPE September Brent ended the day slightly lower, however, at $30.88/bbl, up $1.01 from Wednesday's settlement, while the October contract stood at $29.38, up 74�.
Most of the activity was in the front futures month, which attracted buying from speculators who only rarely dabble in the oil market.
The brokers said that prices this high were unlikely to last long, and with many price gaps left untraded, a sharp technical correction downwards was expected soon.
The price of the September contract for natural gas continued its decline on the IPE, closing at the equivalent of $2.20/Mcf, off 7�.
On the Singapore exchange, the September contract for Brent crude oil ended the week at $30.88, up 99� for the day and up $2.63 from last Friday's close. The October Brent crude contract ended at $29.38/bbl, up 74�.
The price of the OPEC basket of seven crudes stood at $28.17/bbl Thursday, compared with $27.46 the previous day, according to the OPEC Secretariat.