Market watch: Energy futures prices rise with Middle East tension
Energy futures prices rose Friday on international markets as increased tension between Israel and the Palestinians and between Iraq and the UN triggered traders' fears of potential supply disruptions.
By the OGJ Online Staff
HOUSTON, Aug. 13 -- Energy futures prices rose Friday on international markets as increased tension between Israel and the Palestinians and between Iraq and the UN triggered traders' fears of potential supply disruptions.
Markets also benefited from the International Energy Agency's latest prediction that world demand for petroleum will increase by almost 500,000 b/d this year over 2000. The IEA based its assessment on increased demand in Asia and the former Soviet republics.
The September contract for benchmark US light, sweet crudes climbed 41¢ to $28.05/bbl Friday on the New York Mercantile Exchange, while the October contract was up 28¢ to $27.32/bbl. Both contracts continued to climb in after-hours electronic trading to $28.15/bbl and $27.40/bbl, respectively.
Unleaded gasoline for September delivery jumped 1.97¢ to 79.9¢/gal, and home heating oil for the same month increased 0.75¢ to 74.39¢/gal on the NYMEX. The September natural gas contract gained 8.4¢ to $3.04/Mcf.
In London, North Sea Brent crude failed to sustain a rise above $26/bbl Friday. The September Brent contract closed at $25.98/bbl, up 30¢ for the day after trading in a range of $25.86-$26.50/bbl. The September natural gas contract also gained 1.6¢ to the equivalent of $2.40/Mcf on the IPE.
Brent crude was up 22¢ to $26.20/bbl in early trading today on the IPE after Saudi Arabia advised Asian customers that it would be reducing crude sales in September, the designated date for a production cutback by members of the Organization of Petroleum Exporting Countries.
Traders see that as a signal that OPEC is serious about reducing production by another 1 million b/d, analysts said.
The average price for OPEC's basket of seven crudes increased by 41¢ to $24.91/bbl Friday.
For the full week, the OPEC price improved strongly to an average $24.61/bbl from $23.41/bbl the previous week. So far this year, the OPEC basket has averaged $24.79/bbl, compared to an average $27.60/bbl for all of 2000.