MARKET WATCH: Cautious hope for budget lifts oil, gas prices
Front-month crude edged up 0.5% Dec. 17 on the New York market on cautious optimism for negotiation of a US budget. Natural gas climbed 1.3% on forecasts for colder weather during Christmas week, ending a 7-session losing streak.
There was “a veritable Santa rally” in US commodity and equity markets with the Dow Jones Industrial Average up 100 points to “within 400 points of its 52-week high set in October,” said analysts in the Houston office of Raymond James & Associates Inc.
That followed indications President Barak Obama and House Speaker John Boehner had moved from the previous budget deadlock. The Oil Service Index and the SIG Oil Exploration & Production Index moved higher, up 1.1% and 1.2%, respectively.
Although both Democrats and Republicans indicated some concessions on the proposed budget, Marc Ground at Standard New York Securities Inc., the Standard Bank Group, said, “Any optimism is guarded, as is evident in gold’s struggle to make significant gains away from the $1,700/oz anchor.”
Energy prices
The January contract for benchmark US sweet, light crudes rose 47¢ to $87.20/bbl Dec. 17 on the New York Mercantile Exchange. The February contract increased 42¢ to $87.67/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was up 47¢ to $87.20 in step with the front-month futures contract.
Heating oil for January delivery declined 2.44¢ to $2.96/gal on NYMEX. Reformulated stock for oxygenate blending for the same month dipped 0.75¢ to $2.65/gal.
The January natural gas contract recouped 4.4¢ to $3.36/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., regained 6¢ to $3.21/gal.
In London, the new February front-month IPE contract for North Sea Brent decreased 54¢ to $107.64/bbl. Gas oil for January lost 50¢ to $922.25/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes was up 30¢ to $106.07/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.