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Crude kicks arse - surges on 80/barrel numbers
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Oil and other petroleum futures increased this week amid supply concerns sparked by problems at anOklahoma terminal and the confrontation between the West and Iran (which is pretty much the same as it was).
The problems were compounded by a decline in oil inventories at the NYME crude delivery point of Cushing, Okla. That decline was about the only element of Wednesday's inventory report by the Energy Department's Energy Information Administration that was supportive of prices, analysts said.
Analysts said a number of tropical weather systems were not affecting prices, as none are forecast to disrupt critical gas and oil infrastructure in the Gulf of Mexico.
November light, sweet crude jumped $2.58 to settle at $82.88 a barrel Thursday on the Nymex, while October gasoline rose 6.65 cents to settle at $2.0939 a gallon. Prices got an additional boost in afternoon trading from a Dow Jones Newswires report that 700,000 barrels of crude oil originally scheduled to be shipped to the Strategic Petroleum Reserve in September have been rescheduled for October delivery, which will increase demand for crude next month.
Crude prices peaked near $84 a barrel last week before falling for several sessions. Prices settled below $80 Tuesday and dipped below $79 on Wednesday before rallying late in the day. Analysts are divided on oil's future direction. Gheit, for instance, argues that there are no fundamental reasons for $80 oil. He sees oil's true value as being closer to $60 a barrel.
Most analysts agree that oil prices will begin a seasonal decline within the next month.
In other Nymex trading, heating oil futures rose 6.95 cents to settle at $2.2521 a gallon, while November natural gas fell 12.7 cents to settle at $6.919 per 1,000 cubic feet. The government on Thursday reported that natural gas inventories rose by 74 billion cubic feet last week, slightly more than expected. Natural gas inventories are higher than they were one year ago.
In London, November Brent crude rose $2.60 to settle at $80.03 a barrel on the ICE Futures exchange.
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Sep 27, 2007, 5:11 PM
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