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Oil up on hopes for Ireland's debt woes resolution
Source: Agencies |
November 19, 2010, Friday
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OIL prices rose yesterday for the first time in a week while a rally in natural gas was curtailed by a report of record supplies.
Investors resumed buying oil after four days of selling that knocked the price down by 8 percent. PFGBest analyst Phil Flynn said the improvement came as more traders grew confident that Ireland's debt problems will be resolved without spreading to other countries in Europe and potentially affecting demand.
Benchmark oil for December delivery rose US$1.41 to settle at US$81.85 a barrel on the New York Mercantile Exchange. Since the contract expires Friday, many investors shifted to the January contract, which rose US$1.38 to US$82.42 a barrel.
Natural gas fell more than 3 percent before erasing most of the decline late in the session. The price of the December futures contract, which rose more than 5 percent Wednesday, settled at US$4.007, down 2.3 cents
The Energy Department said natural gas supplies rose by 3 billion cubic feet to a record 3.843 trillion cubic feet last week. That's 9.3 percent above the five-year average. Gas supplies have been building as drillers use improved methods to extract large amounts of natural gas from formations of shale rock in Texas, Pennsylvania and other states.
At the same time, there are few signs of improving industrial demand or even sustained cold weather, which will be keys to higher prices, said Tradition Energy analyst Gene McGillian.
"Basically, we're reflecting the weak fundamental picture again," he said.
The price of gas has drifted between about US$3.75 per 1,000 cubic feet and US$4.21 per 1,000 cubic feet since Labor Day, around the time Americans stopped cranked up the air conditioning.
The supply-demand picture could prove to benefit consumers who get electricity generated by natural gas. Some analysts believe their winter heating bills will be about the same as a year ago or slightly higher.
However, U.S. consumers who rely on heating oil to keep their homes warm likely will face higher costs, the analysts said. That product is closely linked to oil, which is traded globally and has fetched higher prices due to stronger demand in Asia and emerging countries.
In other Nymex trading in December contracts, heating oil rose 1.77 cents to US$2.2951 a gallon and gasoline added 7.04 cents to US$2.2283 a gallon.
In London, Brent crude gained US$1.77 to US$85.05 a barrel on the ICE Futures exchange.
Investors resumed buying oil after four days of selling that knocked the price down by 8 percent. PFGBest analyst Phil Flynn said the improvement came as more traders grew confident that Ireland's debt problems will be resolved without spreading to other countries in Europe and potentially affecting demand.
Benchmark oil for December delivery rose US$1.41 to settle at US$81.85 a barrel on the New York Mercantile Exchange. Since the contract expires Friday, many investors shifted to the January contract, which rose US$1.38 to US$82.42 a barrel.
Natural gas fell more than 3 percent before erasing most of the decline late in the session. The price of the December futures contract, which rose more than 5 percent Wednesday, settled at US$4.007, down 2.3 cents
The Energy Department said natural gas supplies rose by 3 billion cubic feet to a record 3.843 trillion cubic feet last week. That's 9.3 percent above the five-year average. Gas supplies have been building as drillers use improved methods to extract large amounts of natural gas from formations of shale rock in Texas, Pennsylvania and other states.
At the same time, there are few signs of improving industrial demand or even sustained cold weather, which will be keys to higher prices, said Tradition Energy analyst Gene McGillian.
"Basically, we're reflecting the weak fundamental picture again," he said.
The price of gas has drifted between about US$3.75 per 1,000 cubic feet and US$4.21 per 1,000 cubic feet since Labor Day, around the time Americans stopped cranked up the air conditioning.
The supply-demand picture could prove to benefit consumers who get electricity generated by natural gas. Some analysts believe their winter heating bills will be about the same as a year ago or slightly higher.
However, U.S. consumers who rely on heating oil to keep their homes warm likely will face higher costs, the analysts said. That product is closely linked to oil, which is traded globally and has fetched higher prices due to stronger demand in Asia and emerging countries.
In other Nymex trading in December contracts, heating oil rose 1.77 cents to US$2.2951 a gallon and gasoline added 7.04 cents to US$2.2283 a gallon.
In London, Brent crude gained US$1.77 to US$85.05 a barrel on the ICE Futures exchange.
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