MARKET WATCH: US light, sweet crude briefly tops $108/bbl

Crude prices on the New York market climbed well above $108/bbl before settling at $107.94/bbl, marking a 16-month high for crude oil on the New York Mercantile Exchange, Barclays Capital analysts said.

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, Apr. 4 -- Crude prices on the New York market climbed well above $108/bbl before settling at $107.94/bbl, marking a 16-month high for crude oil on the New York Mercantile Exchange, Barclays Capital analysts said.

NYMEX prices also rose for heating oil and gasoline based on continuing concerns that conflict in Libya and the Middle East could disrupt fuel supplies from the Organization of Petroleum Exporting Countries (OGJ Online, Apr. 1, 2011).

Separately, positive economic reports from the US and China also provided indications of increasing oil demand.

The US unemployment rate dropped one tenth of a percentage point to 8.9% in February, the Department of Labor’s employment survey showed. The most recent rate is the lowest since April 2009. Still, the report noted the number of unemployed Americans was little changed in February at 13.7 million.

China’s government reported manufacturing growth. The March Purchasing Managers Index (PMI) was 53.4, indicating slightly accelerated factory activity compared with a February PMI of 52.2. The China Federation of Logistics and Purchasing said the March PMI marked improvement from February’s 6-month low.

Energy prices
The NYMEX May contract for benchmark US light, sweet crudes rose $1.22 to $107.94/bbl Apr. 1 while the June contract was up $1.26 to $108.50/bbl. Before closing for the day, the May contract reached a high of $108.47/bbl and the June contract reached $109/bbl. On the US spot market, WTI at Cushing climbed $1.22 to $107.94/bbl.

Heating oil for May delivery rose 2.2¢ to $3.13/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month continued climbing robustly, up 4.36¢ to $3.1513/gal.

The May natural gas contract fell 2.7¢ to $4.362/MMbtu on NYMEX. Barclays Capital attributed this to impending milder temperatures and an increase in gas-directed drilling for the week ended Apr. 1. On the US spot market, gas at Henry Hub, La., held unchanged from Apr. 1’s closing price of $4.295/MMbtu.

In London, the May IPE contract for North Sea Brent crude climbed $1.34 to $118.70/bbl, which Barclays Capital said was the highest Brent settlement price since Aug. 21, 2008. Gas oil for April gained $7.50 to $1,000/tonne.

The average price for the OPEC basket of 12 reference crudes increased 1.94¢ to $113.36/bbl. OPEC Secretariat reported the basket price for March averaged $109.84/bbl compared with $100.29/bbl for February and $92.83/bbl for January.

Contact Paula Dittrick at paulad@ogjonline.com.

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