MARKET WATCH: Little action with NYMEX closed

Sam Fletcher
OGJ Senior Writer

HOUSTON, Jan. 18 -- The New York Mercantile Exchange was closed Jan. 17 for the US holiday honoring civil rights leader Martin Luther King Jr., but in other markets both West Texas Intermediate and North Sea Brent traded lower, down respectively to $91.02/bbl and $97.43/bbl, said James Zhang at Standard New York Securities Inc., the Standard Bank Group.

The decline came on news the Trans-Alaska Pipeline System (TAPS) resumed operation that morning, said Zhang. The pipeline had resumed partial operations last week following a leak at Pumping Station 1, but it was shut down again Jan. 15 for workers to install a 24-in., 170-ft bypass pipeline around the pump station. The second shutdown originally was expected to last 36 hr but problems stretched that period to 58 hr. Alyeska officials expect the 630,000 b/d pipeline to be up to 500,000 b/d through-put within 24 hr (OGJ Online, Jan. 13, 2011).

On Jan. 18, the International Energy Agency, Paris, said it increased previous estimates of global oil product demand in 2010 and 2011 by an average of 320,000 b/d due to economic growth and cold weather in the northern hemisphere. It now estimates global oil demand at 87.7 million b/d in 2010, increasing to 89.1 million b/d in 2011.

Earlier in its first monthly oil report of the year, the Organization of Petroleum Exporting Countries lifted its estimate of world oil demand to 87.3 million b/d in 2011. It said demand for OPEC oil this year will be 29.4 million b/d, up 200,000 b/d from the previous estimate. In December its production was 29.23 million b/d. The average price for OPEC’s basket of 12 benchmark crudes dropped 32¢ to $93.72/bbl on Jan. 17.

Contact Sam Fletcher at [email protected].