Crude futures prices jumped Dec. 12 to the highest level in more than a month in the New York market as another winter storm moved toward the Northeast US.
Crude futures prices jumped Dec. 12 to the highest level in more than a month in the New York market as another winter storm moved toward the Northeast US, renewing traders’ worries about supplies of heating fuels.
AccuWeather Inc. reported more than 75% of the Lower 48 has registered below-average temperatures this month.
Ministers of the Organization of Petroleum Exporting Countries meeting Dec. 12 in Kuwait City agreed to maintain the official production ceiling of 28 million b/d adopted in June for the 10 OPEC members aside from Iraq, which is trying to bring its production back to prewar levels. Some observers concluded that OPEC means to rein in its above-quota production, which has exceeded 2 million b/d in recent months.
However, OPEC Conference Pres. Ahmad Fahad Al-Ahmad Al-Sabah said production would be maintained at the current level of 28.2 million b/d among those 10 members. An earlier pledge by OPEC members to make its 2 million b/d of excess production capacity available to buyers in order to hold down crude prices expires at the end of this month.
On Dec. 13, the International Energy Agency in Paris increased its estimate for growth in world oil demand to 1.79 million b/d in 2006 from 1.66 million b/d previously. Although IEA reduced its 2005 crude demand growth estimate by 20,000 b/d to 1.18 million b/d for an annual growth of 1.5%, it said annual consumption growth should average 1.8-2 million b/d through 2010.
IEA revised US product demand in September upward by 80,000 b/d ‘as new data show the prior hurricane-related demand-loss estimates were overstated,’ said analysts at Friedman, Billings, Ramsey & Co. Inc., Arlington, Va. ‘Chinese demand increased 8% year-over-year during September, which is stronger than earlier in 2005.’
The agency expects supply growth to exceed demand through 2006 but will be outpaced by consumption in 2007-08. It maintained its fourth-quarter estimated call on OPEC crude at 29.6 million b/d, near recent record-high production levels.
On Dec. 12, the US Minerals Management Service still listed as evacuated 126, or 15.4%, of the manned platforms in the Gulf of Mexico. It reported 441,394 b/d of crude and 2.3 bcfd of natural gas production was still shut in. Cumulative production lost Aug. 26-Dec. 12 totaled 101.7 million bbl of crude and 526.2 bcf of natural gas. That’s equivalent to 18.6% of the crude and 14.4% of the natural gas produced annually from federal leases in the gulf. MMS officials said they would now issue storm-related updates on Gulf of Mexico activity twice weekly on Mondays and Thursdays.
The January contract for benchmark US light, sweet crudes jumped by $ 1.91 to $ 61.30/bbl Dec. 12 on the New York Mercantile Exchange, the biggest 1-day gain in 5 weeks. The February contract advanced by $ 1.88 to $ 62.26/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., increased by $ 1.91 to $ 61.31/bbl. Gasoline for January delivery escalated by 4.19Â¢ to $ 1.65/gal. Heating oil for the same month gained 4.07Â¢ to $ 1.77/gal.
The January natural gas contract shot up by 52.9Â¢ to $ 14.84/MMbtu on short covering by traders, said analysts at Enerfax Daily.
In London, the January contract for North Sea Brent crude climbed by $ 2.13 to $ 59.44/bbl on the International Petroleum Exchange. Gas oil for December was unchanged at $ 510.25/tonne.
The average price for OPEC’s basket of 11 benchmark crudes dipped by 45Â¢ to $ 53.50/bbl on Dec. 12.
Source : ogj.pennnet.com