MARKET WATCH: Oil prices rebound briefly pending more sanctions against Russia

Oil prices rebounded by more than $1/bbl on the New York market on Sept. 11 in a second consecutive week for roller-coaster energy prices as traders reacted to various revised forecasts this week calling for slower 2014-15 global oil demand growth than previously anticipated.

Oil prices rebounded by more than $1/bbl on the New York market on Sept. 11 in a second consecutive week for roller-coaster energy prices as traders reacted to various revised forecasts this week calling for slower 2014-15 global oil demand growth than previously anticipated.

In early Sept. 12 trading, oil prices dropped upon news that the European Union planned to implement additional sanctions on Russia. EU officials approved the sanctions on Sept. 8 but had waited to make them effective.

A cease-fire agreement in eastern Ukraine appears to be holding. EU and US officials say they are watching to see if Russia President Vladimir Putin promotes negotiations to settle conflict between pro-Russian separatists and the Ukrainian government.

US President Barack Obama said his administration was contemplating additional sanctions on Russia.

The Wall Street Journal reported that proposed sanctions being evaluated might keep US-based oil companies from working with Russia on future exploration in the Russian Arctic and Russia’s deep water.

Those latest proposed sanctions are not final and might never be implemented depending upon the success of the cease-fire agreement in Ukraine, WSJ said.

Energy prices

The New York Mercantile Exchange October crude oil contract rose by $1.16 to $92.83/bbl on Sept. 11. The November contract regained $1.02 to $91.86/bbl. The gains followed the previous day’s settlement in which both the October and November contracts slumped by more than $1/bbl.

The natural gas contract for October dropped 13¢ to a rounded $3.82/MMbtu. On the US cash market, gas at Henry Hub, La., was down 3¢ to $3.93/MMbtu.

Heating oil for October delivery was up less than a penny to a rounded $2.76/gal. Reformulated gasoline stock for oxygenate blending for October delivery dropped less than a penny to a rounded $2.52/gal.

The October ICE contract for Brent crude delivery was up slightly, adding 4¢ to reach $98.08/bbl. The November Brent contract gained 8¢ to $98.86/bbl. The ICE gas oil contract for September remained unchanged at $831/tonne while the October gas oil contract gave up $2.25 to $833/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes on Sept. 11 was $95.35/bbl, down 58¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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