MARKET WATCH: Crude prices advance modestly
Crude prices continued rising Jan. 18 for the third consecutive trading session largely because of increased political tension caused by a hostage takeover by Islamic militants at a gas processing plant in Algeria (OGJ Online, Jan. 16, 2013).
Algerian special forces stormed the plant Jan. 19 to end the 4-day siege. Initial reports indicated 32 rebels and 23 hostages died, but the death count later climbed to 81 with the discovery of more bodies and the subsequent death of one wounded hostage who had been freed. Bomb squads continued to sweep the facility for hidden explosives (OGJ Online, Jan. 18, 2013).
On Jan. 21, Walter de Wet at Standard New York Securities Inc., the Standard Bank Group, reported, “The front-month Brent crude contract is moving largely sideways today” in line with the US dollar “that has also done very little since markets opened.” He said, “The Brent market has failed to break convincingly above the $112/bbl level since mid-November, and we maintain that the bias from current price levels lies to the downside. We believe that demand growth would not be strong enough this year to offset growing supply from non-OPEC members.”
In the US futures market, the front-month contract for benchmark crudes “continued to benefit from post-Seaway pipeline interest as well as some growing optimism over the US economy,” Ground said. “The market still looked confident, adding 7.6 million bbl to speculative longs and once again shedding speculate shorts for the fifth consecutive week, although only 2.3 million bbl were shed this past week (compared with the 7.9 million bbl of the previous week).”
Energy prices
The February contract for benchmark US light, sweet crudes made a modest advance of 7¢ to $95.56/bbl Jan. 18 on the New York Mercantile Exchange. The March contract increased 10¢ to $96.04/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., followed the front-month futures contract up 7¢ to $95.56/bbl.
Heating oil for February delivery gained 3.13¢ to $3.05/gal on NYMEX. Reformulated stock for oxygenate blending for the same month rose 2.84¢ to $2.80/gal.
The February natural gas contract continued to rally, up 7.2¢ to $3.57/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., rebound by 8.5¢ to $3.51/MMbtu.
In London, the March IPE contract for North Sea Brent was up 79¢ to $111.89/bbl. Gas oil for February regained $3.25 to $955.75/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes increased 91¢ to $108.92/bbl. So far this year, OPEC’s basket price has averaged $108.56/bbl.
Contact Sam Fletcher at [email protected].
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.
