Market watch: Energy prices surge on international futures markets
Energy prices surged Tuesday as a fire at El Paso Energy Corp.�s Aruba refinery triggered bidding for petroleum futures on international markets. On the New York Mercantile Exchange, the May contract for home heating oil shot up 5.56� to 79.14�/gal.
By the OGJ Online Staff
HOUSTON, Apr. 11 -- Energy prices surged Tuesday as a fire at El Paso Energy Corp.�s Aruba refinery triggered bidding for petroleum futures on international markets.
El Paso�s 280,000 b/d distillates refinery in Wicklund, Aruba, was shut down after a fire Monday night. Traders apparently were bothered also by reports that Sunoco Inc. was bringing down its Pt. Breeze, Pa., refinery for routine maintenance and of restart delays at two other refineries.
The May contract for benchmark US light, sweet crude jumped by $1.20 to $28.48/bbl Tuesday on the New York Mercantile Exchange. The June contract also was up $1.09 to $28.68/bbl. But both contracts declined in after-hours electronic trading when the American Petroleum Institute�s weekly report on US inventories proved more bearish than expected.
The API reported an increase of 4.7 million bbl in US crude inventories to 307.9 million bbl. US gasoline stocks rose by 319,000 bbl to a total 192.5 million bbl, still well below year-ago levels, while distillate stocks declined by 1.7 million bbl to 104.7 million bbl.
On the NYMEX, the May contract for home heating oil shot up 5.56� to 79.14�/gal, primarily as a result of the Aruba refinery fire. Unleaded gasoline for the same month gained 3.39� to $1.0251/gal.
Natural gas for May delivery also rose by 8.2� to $5.56/Mcf on the NYMEX.
In London, North Sea Brent crude futures soared to the highest levels in weeks on the International Petroleum Exchange. Traders seized upon the same bullish indicators and expectations to provide necessary volatility to that market where prices had stagnated for days around $25/bbl, analysts said.
The continued perception of tight US gasoline supplies could help support energy futures prices through the summer, said analysts.
The May Brent contract closed at $26.54/bbl Tuesday, up $1.26 for the day, after trading in the range of $25.46-$26.77/bbl. The May natural gas contract also gained 2� to the equivalent of $3.27/Mcf on the IPE.
The average price for the Organization of Petroleum Exporting Countries� basket of seven crudes also increased by $1 to $24.87/bbl Tuesday.