MARKET WATCH: NYMEX crude oil futures rally in early Dec. 29 trading

Crude oil prices ended Christmas week by dropping more than $1/bbl for the Dec. 26 settlement on the New York futures market, but oil prices rallied in early Dec. 29 trading on reports of a fire at the Libyan port of Es Sider after a rocket attack last week to oil storage tanks.

Crude oil prices ended Christmas week by dropping more than $1/bbl for the Dec. 26 settlement on the New York futures market, but oil prices rallied in early Dec. 29 trading on reports of a fire at the Libyan port of Es Sider after a rocket attack last week to oil storage tanks.

“There’s tension in Libya, but liquidity is very thin so not much is needed to move oil prices,” said Hans van Cleef, senior energy economist at ANB Amro in Amsterdam. He noted that oil prices for the most part continued to be driven downward by ample world oil supply. Both Brent and the US light, sweet crude prices had fallen for 5 consecutive weeks as of Dec. 26.

Armed conflicts between Islamist militias and the Libya government resurfaced earlier in December, and Libya declared force majeure on two key ports Dec. 14.

PVM Consultancy told the Wall Street Journal that Libya’s oil output was down to 230,000 b/d, a sharp drop from Libya’s export capacity of 1.3 million b/d.

Energy prices

The New York Mercantile Exchange February crude oil contract dropped $1.11 on Dec. 26, closing at $54.73/bbl. The March contract declined by $1.09 to $55.13/bbl.

The natural gas contract for January settled down 2.3¢ to a rounded $3.01/MMbtu after having briefly dipped during the trading session to $2.97/MMbtu. It was the first time gas prices have dipped below $3/MMbtu since Sept. 26, 2012.

However, traders noted that trading volume was very low on Dec. 26, and low-trading volume means than any price move can appear significant. The cash gas price at Henry Hub, La., was unavailable for Dec. 26.

Heating oil for January delivery dropped 1.6¢ to a rounded $1.90/gal. Reformulated gasoline stock for oxygenate blending for January was down by less than a penny to a rounded $1.51/gal.

The February 2015 ICE contract for Brent crude oil fell 79¢ to $59.45/bbl. The March contract also declined 79¢ to $60.22/bbl. The ICE gas oil contract for January dropped $4.75 to $539/tonne.

The average price for OPEC’s basket of 12 benchmark crudes on Dec. 24 was $56.06/bbl, up 97¢ from the previous day. The OPEC office was closed so additional basket prices were not immediately available.

Contact Paula Dittrick at paulad@ogjonline.com.

*Paula Dittrick is editor of OGJ’s Unconventional Oil & Gas Report.

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