Sam Fletcher
Senior Writer
HOUSTON, July 15 -- The fear factor triggered a jump in oil prices above $40/bbl again Wednesday with reports that a South Korean tanker refused to load crude at Iraq's main export terminal at Basra on the Persian Gulf because of terrorist concerns.
The August contract for benchmark US sweet, light crudes closed at $40.97/bbl, up by $1.53 for the day, after spiking at $41.05/bbl during earlier trading Wednesday, the highest near-month price level since June 2. The same contract had closed at $40.33/bbl on July 8 after the US Department of Homeland Security issued warnings that terrorist might try to disrupt this year's presidential election (OGJ Online, July 9, 2004). However, the price had retreated during the three subsequent trading sessions.
The September crude contract shot up by $1.61 to $41.15/bbl Wednesday on NYMEX, while on the US spot market, West Texas Intermediate at Cushing, Okla., climbed by $1.55 to $40.98/bbl.
Gasoline for August delivery jumped by 3.07¢ to $1.316/gal Wednesday, while heating oil for the same month gained 3¢ to $1.0917/gal. The August natural gas contract advanced by 7.2¢ to $5.98/Mcf on NYMEX. The natural gas market is "still recovering from Monday's sharp drop as some value-buyers reacted to the lowest front-month prices since mid-April" prior to "a late boost" Wednesday from the surge in oil prices, said analysts at Enerfax Daily.
Meanwhile, they said, "The forecast calls for lower-than-average temperatures and is certainly milder than some independent meteorologists had been predicting as recently as last Friday."
Early Thursday, the US Energy Information Administration reported 108 bcf of natural gas were injected into US underground storage during the week ended July 9, compared with injections of 109 bcf the previous week and 95 bcf during the same period a year ago. US natural gas storage now totals nearly 2.2 tcf, up by 251 bcf from year-ago levels and 54 bcf above the 5-year average for this time of year.
In London, the August contract for North Sea Brent crude soared by $1.85 to $38.54/bbl on the International Petroleum Exchange. Gas oil for August delivery gained $5.25/bbl to $338.75/tonne. The August natural gas contract increased by 2.1¢ to the equivalent of $4.04/Mcf on IPE.
The average price for the Organization of Petroleum Exporting Countries' basket of seven benchmark crudes rose by 66¢ to $35.79/bbl Wednesday.
Contact Sam Fletcher at [email protected]