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Energy futures on upswing
Source: Agencies |
December 25, 2009, Friday
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ENERGY prices are ending the year on an upswing with large storms, falling supplies, a weak dollar and a slightly better employment picture sending futures higher.
Crude futures closed above US$78 per barrel for the first time in more than a month Thursday in shortened holiday trading as the U.S. government reported that unemployment benefit claims from newly laid-off workers fell for the 16th straight week.
Benchmark crude for February delivery rose nearly 2 percent, or US$1.38, to settle at US$78.05 a barrel on the New York Mercantile Exchange.
Oil prices climbed 6 percent on the week, though stabilizing economy hasn't seriously dented huge stores of crude, natural gas and gasoline. Even with a 5 million barrel draw on crude reported Wednesday by the government, supplies remain well above normal.
The amount of crude at Cushing, Oklahoma, where crude traded on the New York Mercantile Exchange is stored, is very close record highs.
The U.S. economy remains fragile and save for an occasional jump in demand during holidays, Americans are not buying gasoline and other fuels in large quantities. Even distillates, which include heating oil, remain at historically high levels despite winter storms in the Northeast and Midwest.
Industrial demand for natural gas is extremely weak. The government said Thursday that natural gas in storage fell by a less-than-expected 166 billion cubic feet to 3.4 trillion cubic feet. Gas in storage is 13 percent above than the five-year average.
Refineries that convert oil to fuel are slowing their purchases of crude drastically. Over the past two weeks the amount of crude going into refineries is down 144,000 barrels each day.
Analysts Stephen Schork says Wall Street trading firms may be buying oil contracts in large numbers, but refineries are shutting down because they can't turn a profit buying crude.
This year, refineries have shut down in California, New Jersey, New Mexico and most recently in Delaware City, Delaware.
"Demand to import and refine crude oil by the guys who import and refine crude oil will remain low into the first quarter," Schork said. "Bottom line, there are no refineries in lower Manhattan, but there used to be one in Delaware City."
In other Nymex trading in January contracts, heating oil rose 2.38 cents to settle at US$2.0356 while gasoline rose 2.3 cents to settle at US$1.9896. Natural gas tumbled 17.8 cents to settle at US$5.643 per 1,000 cubic feet.
In London, Brent crude for February delivery rose 86 cents to settle at US$76.31 on the ICE Futures exchange.
Crude futures closed above US$78 per barrel for the first time in more than a month Thursday in shortened holiday trading as the U.S. government reported that unemployment benefit claims from newly laid-off workers fell for the 16th straight week.
Benchmark crude for February delivery rose nearly 2 percent, or US$1.38, to settle at US$78.05 a barrel on the New York Mercantile Exchange.
Oil prices climbed 6 percent on the week, though stabilizing economy hasn't seriously dented huge stores of crude, natural gas and gasoline. Even with a 5 million barrel draw on crude reported Wednesday by the government, supplies remain well above normal.
The amount of crude at Cushing, Oklahoma, where crude traded on the New York Mercantile Exchange is stored, is very close record highs.
The U.S. economy remains fragile and save for an occasional jump in demand during holidays, Americans are not buying gasoline and other fuels in large quantities. Even distillates, which include heating oil, remain at historically high levels despite winter storms in the Northeast and Midwest.
Industrial demand for natural gas is extremely weak. The government said Thursday that natural gas in storage fell by a less-than-expected 166 billion cubic feet to 3.4 trillion cubic feet. Gas in storage is 13 percent above than the five-year average.
Refineries that convert oil to fuel are slowing their purchases of crude drastically. Over the past two weeks the amount of crude going into refineries is down 144,000 barrels each day.
Analysts Stephen Schork says Wall Street trading firms may be buying oil contracts in large numbers, but refineries are shutting down because they can't turn a profit buying crude.
This year, refineries have shut down in California, New Jersey, New Mexico and most recently in Delaware City, Delaware.
"Demand to import and refine crude oil by the guys who import and refine crude oil will remain low into the first quarter," Schork said. "Bottom line, there are no refineries in lower Manhattan, but there used to be one in Delaware City."
In other Nymex trading in January contracts, heating oil rose 2.38 cents to settle at US$2.0356 while gasoline rose 2.3 cents to settle at US$1.9896. Natural gas tumbled 17.8 cents to settle at US$5.643 per 1,000 cubic feet.
In London, Brent crude for February delivery rose 86 cents to settle at US$76.31 on the ICE Futures exchange.
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