Market watch, Sept. 15
Energy futures prices generally closed higher in trading on the New York Mercantile Exchange Thursday, with oil reversing its brief, post-OPEC-meeting decline and natural gas reaching an all-time high. News about tensions between two neighboring countries in the Middle East affected the market in a bullish manner. Iraq is again accusing Kuwait of stealing its oil after Kuwait drilled in a zone straddling the two countries' border.
Energy futures prices generally closed higher in trading on the New York Mercantile Exchange Thursday, with oil reversing its brief, post-OPEC-meeting decline and natural gas reaching an all-time high.
News in the press about tensions between two neighboring countries in the Middle East affected the market in a bullish manner. Iraq is again accusing Kuwait of stealing its oil after Kuwait drilled in a zone near the border between the two countries. Kuwait says the land it was drilling is its own.
A similar accusation led to the Persian Gulf War incident 10 years ago.
NYMEX benchmark light, sweet crude oil advanced by 25� to rest at $34.07/bbl for October delivery, while the November contract stood at $33, up 37�. Refined petroleum products closed mixed, with October home heating oil losing 0.35� to settle at $1.0072/gal, while unleaded gasoline for the same month put on 0.58� to settle at 93.92�/gal.
Refinery problems in Illinois and pipeline problems in Oklahoma were the sources behind the rise in US gasoline prices. Brokers said the rumored outage at Tosco Corp.'s Illinois refinery was the main piece of market-moving news and was seized upon by players eager to reverse the downward trend seen over the past few days.
NYMEX natural gas for October delivery surged by 14� to end at $5.20/Mcf. This is a new all-time record, reached after news of a developing storm in the Caribbean that could affect production facilities at a time when inventories of gas are low.
In after-hours electronic access trading in New York, NYMEX crude was fetching $34.40/bbl for the October position and $33.38 for the November contract, both up from the NYMEX close.
Meanwhile, in London, North Sea Brent crude oil futures rallied Thursday on the International Petroleum Exchange after falling for a few successive days. The October Brent contract (which expired at the close of trade) settled at $31.94/bbl, up 41� from Wednesday's close. The day's high was $32.02, and the low, $31.40.
October gas oil ended lower at $311.25/tonne, down by $7.75, mostly in line with NYMEX losses on heating oil futures. The day's high on October gas oil was $321, and the low was $307.50.
The October natural gas contract closed at the equivalent of $2.96/Mcf on the IPE, down 4�.
Despite reports that US President Bill Clinton's is considering use of the US Strategic Petroleum Reserve stockpile to avert fuel shortages, the futures market still sees the US situation as precarious, with very low inventories and high demand.
On the Singapore exchange, the November contract for Brent crude closed 29� higher at $32.29/bbl, and the December contract settled at $31.99/bbl.
The Organization of Petroleum Exporting Countries' basket of seven crudes stood at $30.91/bbl Thursday, compared with $30.40/bbl the previous day.