Renewed concerns about possible disruptions to Iraqi oil exports helped fuel a rebound in energy futures prices Wednesday on the New York Mercantile Exchange (NYMEX) following Tuesday's "spectacular sell-off" that traders said took the market to an oversold state following news of warmer than expected weather.
Concerns about Iraqi supply disruptions reappeared after Iraqi Oil Minister Amer Mohammed Rasheed said Iraq would stand by its proposed prices for crude next month, despite the United Nations' disapproval.
The bullish sentiment even led to traders ignoring this week's inventory report from the American Petroleum Institute, which showed that the nation's crude stocks climbed by 1.83 million bbl during the previous week, while distillate inventories, which include home heating oil, rose 1.63 million bbl.
The API released the report after the end of the trading session on Tuesday. Most traders were expecting a bearish slant on the figures from earlier estimates.
NYMEX sweet, light crude, the American benchmark, advanced 41� to finish at $34.63/bbl for January delivery, while the February contract stood at $33.49, up by 28�.
Refined petroleum products also closed higher, with December home heating oil rising by 0.81� to finish at
$1.0318/gal, while unleaded gasoline for the same month jumped by 2.77� to end at 90.68�/gal.
However, NYMEX natural gas for January delivery slipped by 2.6� to end at $6.18/Mcf.
In after-hours electronic access trading in New York, light, sweet crude was fetching $34.56/bbl for the January position and $33.59 for the February contract.
Meanwhile, in London Wednesday on the International Petroleum Exchange, North Sea Brent oil futures rebounded from around $32/bbl, due to the NYMEX-led bullish reaction to the statements from Iraq.
The US oil stock figures had led to a fall in prices to below $32/bbl and a decline by as much as $6/tonne in the value of gasoil futures, because both distillate and crude stocks had risen far higher than expected last week.
As usual, the NYMEX market showed the strongest reaction�there had been little movement in prices on the IPE at midday Wednesday�but prices soon rebounded, at least for crude, on the Iraqi news.
IPE January Brent futures settled at $32.68/bbl, up by 49� from the previous close. The day's high was $32.75 and the low $31.95. On the IPE, the December natural gas contract settled at the equivalent of $4.16/Mcf, down 3�.
On the Singapore exchange, North Sea Brent crude for January rose 49� to $32.68/bbl. The February position rose 38� to $31.89/bbl.
The price of the OPEC basket of seven crudes stood at $30.50/bbl Wednesday, compared with $30.58 the previous day.
