MARKET WATCH: Oil prices rise moderately with no major impetus

Sept. 24, 2012

Energy prices continued to rise moderately Sept. 21, with no major events to push the market in any direction. Instead, markets appeared buoyed by the economic stimulus programs earlier announced by the US Federal Reserve System and Japan’s central bank.

Sam Fletcher

Investors last week seemed at times uncertain whether to focus on “any potential leftover value” from the Fed’s proposed third round of quantitative easing, the 3-day selloff of oil futures that started Sept. 17, hopes for a Spanish bailout, the Bank of Japan's decision to expand monetary easing, “or the iPhone's launch,” said analysts in the Houston office of Raymond James & Associates Inc.

It was, as they said, “a lot to take in.” But broader markets ended the week flat while crude dropped 6% in the New York market, with subsequent losses of 5% on the SIG Oil Exploration & Production Index and 3% on the Oil Service Index.

Energy prices

The new front-month November contract for benchmark US light, sweet crudes and the December contract gained 47¢ each to $92.89/bbl and $93.21/bbl, respectively, Sept. 21 in the New York Mercantile Exchange. On the US spot market, West Texas Intermediate at Cushing, Okla., climbed $1.02 to match the November contract’s closing price of $92.89/bbl.

Heating oil for October delivery increased 2.32¢ to $3.12/gal on NYMEX. Reformulated stock for oxygenate blending for the same month rose 3.85¢ to $2.94/gal.

The October natural gas contract continued to rally, up 8.8¢ to $2.89/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., inched up 0.7¢ to $2.77/MMbtu.

In London, the November IPE contract for North Sea Brent advanced $1.39 to $111.42/bbl. Gas oil for October escalated $11.50 to $974.75/tonne.

The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes regained $2.27 to $108.15/bbl. So far this year, OPEC’s basket price has averaged $110.24/bbl.

Contact Sam Fletcher at [email protected].

About the Author

Sam Fletcher | Senior Writer

I'm third-generation blue-collar oil field worker, born in the great East Texas Field and completed high school in the Permian Basin of West Texas where I spent a couple of summers hustling jugs and loading shot holes on seismic crews. My family was oil field trash back when it was an insult instead of a brag on a bumper sticker. I enlisted in the US Army in 1961-1964 looking for a way out of a life of stoop-labor in the oil patch. I didn't succeed then, but a few years later when they passed a new GI Bill for Vietnam veterans, they backdated it to cover my period of enlistment and finally gave me the means to attend college. I'd wanted a career in journalism since my junior year in high school when I was editor of the school newspaper. I financed my college education with the GI bill, parttime work, and a few scholarships and earned a bachelor's degree and later a master's degree in mass communication at Texas Tech University. I worked some years on Texas daily newspapers and even taught journalism a couple of semesters at a junior college in San Antonio before joining the metropolitan Houston Post in 1973. In 1977 I became the energy reporter for the paper, primarily because I was the only writer who'd ever broke a sweat in sight of an oil rig. I covered the oil patch through its biggest boom in the 1970s, its worst depression in the 1980s, and its subsequent rise from the ashes as the industry reinvented itself yet again. When the Post folded in 1995, I made the switch to oil industry publications. At the start of the new century, I joined the Oil & Gas Journal, long the "Bible" of the oil industry. I've been writing about the oil and gas industry's successes and setbacks for a long time, and I've loved every minute of it.