Market Watch, June 12
Oil futures prices are expected to rise again on the New York Mercantile Exchange (NYMEX) Monday after reports that the Organization of Petroleum Exporting Countries (OPEC) wouldn't decide whether to release more supply until its June 21 meeting in Vienna.
Oil futures prices were expected to rise again on the New York Mercantile Exchange (NYMEX) Monday after reports that the Organization of Petroleum Exporting Countries (OPEC) wouldn't decide whether to release more supply until its June 21 meeting in Vienna.
OPEC Secretary-General Rilwanu Lukman on Sunday said the cartel's plan to moderate oil price spikes through a price band mechanism won't begin before OPEC's June 21 meeting. Under its output-reduction plan, OPEC has agreed to raise oil production by 500,000 b/d any time a rolling average of the OPEC basket of crudes went above $28/bbl. It didn't boost output when the average rose above $28 on June 8, however, and reports say cartel members aren't unanimous on whether to raise production.
West Texas Intermediate crude closed at $30.20/bbl on NYMEX Friday, up 42� from last Thursday's close and up more than $11 from the $18.43 closing price reported this time a year ago. Crude is expected to climb more than 50� today, matching gains made in afterhours trading when the contract rose 67� to $30.87 per bbl.
NYMEX July gasoline was trading 1.5� over Friday's close at $1.0182/gal. Gasoline futures got a boost from several refinery outages, which added to concerns over tight supplies. Problems have been reported at Tosco Corp. refineries in California and New Jersey, a Coastal Corp. refinery in New Jersey, and a BP Amoco refinery in Texas. Unconfirmed reports also noted a refinery problem at Exxon's Baytown facility in southeast Texas.
NYMEX July heating oil contract also is expected to rise 1.5� from its close at 74.23�/gal.
The July natural gas contract on NYMEX closed at $4.165/MMbtu, up from $2.305/MMbtu a year ago.
On the International Petroleum Exchange (IPE), the July natural gas contract closed Friday at the equivalent of $2.59, down 30�. The July contract for gas oil futures on the IPE traded at $2.3225.
Also, the July IPE North Sea Brent contract surged above $30/bbl, the highest seen since March 8, trading at $30.30 by midmorning after reaching $30.45, up 87�.