Market Watch, June 8
Oil futures prices rose on international markets Wednesday, again approaching the seemingly magical level of $30/bbl. Natural gas prices declined.
Oil futures prices rose on international markets Wednesday, again approaching the seemingly magical level of $30/bbl.
On the New York Mercantile Exchange (NYMEX), the July contract for the benchmark blend of light, sweet crudes climbed 20� to $29.95/bbl, while the August contract was up 31� to $29.28/bbl. In after-hours electronic trading, however, both contracts slipped to $29.85/bbl and $29.25/bbl respectively.
In London, the July contract for North Sea Brent jumped 63� to $29.22/bbl Wednesday on the International Petroleum Exchange (IPE).
That rise reflected market uncertainty as to whether OPEC members will agree at their upcoming meeting to increase production�and, if they do, when. There is speculation that any increase would come at the start of the third quarter rather than now.
The average price for OPEC's basket of seven crudes increased 27� to $28.44/bbl Wednesday.
Meanwhile, the NYMEX July contract for unleaded gasoline shot up 2.23� to $1.0106/gal, a large gain in a market where price movements usually are measured by fractions of a penny.
The rise was triggered by the unexpected closure of a coker at a West Coast refinery and a cat cracker at an east coast plant. Refinery problems always have a bullish effect on the US gasoline market, especially now when stocks are extraordinarily low at the start of the peak summer driving season.
On Tuesday afternoon, a 15-minute fire damaged a coker unit at Tosco Refining Co.'s Avon oil refinery at Martinez, Calif. Reportedly, the company decided to shut down the unit Wednesday after other measures failed to stop carbon dust emissions. The refinery will continue to operate, as will Tosco's Rodeo refinery.
It was widely reported that a 50,000 b/d cat cracker at Coastal Corp.'s 140,000 b/d Eagle Point, NJ, refinery was shut down due to ongoing problems. Coastal declined to comment, however.
NYMEX trade in petroleum products was mixed, however, with the July contract for home heating oil losing 0.43� to 74.91�/gal.
The July contract for natural gas dropped 34.9� to $3.95/Mcf on the NYMEX. On the IPE, the July gas contract was down 3� to the equivalent of $3.05/Mcf.