Market watch: Energy futures rise on Middle East tensions
Energy futures prices continued their rise in trading on the New York Mercantile Exchange and the International Petroleum Exchange Monday. The increase in tensions in the Middle East was behind the market's rise, according to analysts.
By the OGJ Online Staff
HOUSTON, Dec. 4 -- Energy futures prices continued their rise in trading on the New York Mercantile Exchange Monday.
The increase in tensions in the Middle East was behind the market's rise, according to analysts.
The January contract for light, sweet crude, the US benchmark, rose 65¢ to rest at $20.09/bbl, while the February contract rose 75¢ to $20.39. In after-hours electronic access trading, the January contract was fetching $20.39 and the February contract $20.66.
Refined petroleum products also closed higher, with January home heating oil rising by 1.18¢ to rest at 55.77¢/gal, while unleaded gasoline for the same month jumped by 2.15¢ to settle at 56.02¢/gal.
However, NYMEX natural gas for January delivery declined by 6.7¢ to end at $2.634/Mcf.
As the conflict between Israel and the Palestinians escalated, traders feared that it could destabilize the whole region, affecting production and exports from the Middle East.
Although there were no signs of an escalation in tensions outside Israel, traders termed the situation volatile as military operations by Israel gained momentum.
Meanwhile, in London Monday, North Sea Brent crude oil futures also rose on news of the increased tensions in the Middle East.
Again, developments prompted short covering on the futures markets, amid fears that oil exports from the Middle East could be disrupted.
Although brokers conceded that it was unlikely that this would happen, oil futures had tended to jump higher on any increased confrontation between Israel and Palestinian forces.
On the International Petroleum Exchange Monday, January Brent futures settled at $19.71/bbl, up by 57¢ from the previous close. The day's high was $19.98 and the low $18.65.
Also on the IPE, the January contract for natural gas rose 9¢ to close at the equivalent of $3.80/Mcf.
The Organization of Petroleum Exporting Countries' basket of seven crudes stood at $18.12/bbl Monday, compared with $17.45 the day before.