Related News

Home » Business » Energy

Oil surges close to US$67 a barrel in volatile week

OIL prices surged above US$66 a barrel yesterday, rising in lockstep with major global indexes in what has become a very volatile week for energy markets.

With regulators meeting in Washington to consider new limits on speculators that some blame for wild swings in oil and gas prices, crude fell 6 percent Wednesday only to rebound by almost that much yesterday.

Benchmark crude for September delivery rose US$3.59, or 5.6 percent, to settle at US$66.94 a barrel on the New York Mercantile Exchange. Oil, gas futures, heating oil and natural gas contracts all jumped at least 5 percent in afternoon trading.

Crude prices have recently tracked stock markets and that trend continued yesterday. The Dow Jones industrial average surged 163.39 points to 9,234.11 in morning trading. Crude prices rose sharply only minutes after the U.S. financial markets opened.

The dollar also weakened, which tends to lure investor money into commodities as a hedge against inflation.

"You need to really worry about a market that sells off on a very large build and supply one day, and then it rebounds on no headline at all," analyst and trader Stephen Schork said.

Early in the day, traders focused on a series of better-than-expected earnings.

In Japan, carmakers Nissan Motor Co. and Honda Motor Co. jumped 11.1 percent and 8.2 percent on strong profits. In Europe, BT Group PLC rose 12.7 percent and its French peer Alcatel-Lucent SA rose 7.7 percent after they also unveiled better than expected second-quarter earnings.

Two major companies in the petroleum industry, Exxon Mobil and Royal Dutch Shell PLC, reported steep profit drops.

Exxon Mobil said its quarterly profit fell 66 percent, more than expected, from a year ago as crude and gas prices dropped and refining margins tightened. Royal Dutch Shell said its profit for the same period fell 67 percent for similar reasons, and CEO Peter Voser promised to cut jobs and reduce capital spending next year.

Energy demand has evaporated this year, with people driving less, flying less, and energy-intense industries sharply cutting back production and jobs.

Stores of natural gas, which is used to power plants, continues to grow.

The Energy Information Administration said yesterday that natural gas supplies grew another 71 billion cubic feet last week, putting the country's stockpiles more than 23 percent above last year.

Still, retail gas prices have been building for more than a week as refiners cut back on production. The U.S. average added less than a penny overnight to US$2.516 a gallon (66 cents a liter), according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded gas is 11.7 cents cheaper than a month ago, and it's US$1.41 cheaper than the same time last year.

In other Nymex trading, gasoline for August delivery jumped 13.61 cents, or 7.3 percent, to settle at US$1.9911 a gallon and heating oil added 9.72 cents to settle at US$1.7685 a gallon. Natural gas for September delivery surged 19.5 cents to settle at US$3.743 per 1,000 cubic feet.

In London, Brent prices climbed US$3.58 to settle at US$70.11 a barrel on the ICE Futures exchange.


Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.

沪公网安备 31010602000204号

Email this to your friend