Nymex Crude Settles at Record High $99.62/Bbl
After months of anticipation, oil futures touched $100 a barrel for the first time Wednesday and closed at a record high in a rally unleashed by supply concerns.
On the first day of trading in 2008, light, sweet crude for February delivery settled $3.64, or 3.8%, higher at $99.62 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange rose $3.99 to settle at $97.84 a barrel, also a record.
Nymex officials said one contract, which represents 1,000 barrels, changed hands at $100 a barrel just after noon on the Nymex floor. Though oil remains below its inflation-adjusted record high U.S. price of $102.81, set in April 1980, analysts say that milestone now may be around the corner. Wednesday's jump follows a 57% rise for crude in 2007.
"$100 is really a mythical number. It has no real significance other than psychological. It will be taken out, if not tonight, then in the next couple of days as speculative money continues to pour in," said John Kilduff, senior vice president at MF Global in New York.
Wednesday's rally was set in motion by reports of militant attacks Tuesday on targets in Nigeria's main oil industry center of Port Harcourt that left 13 dead. The violence spurred fears that supplies from Africa's largest oil-producing nation, already hampered by past militant action, could suffer more disruption in the future.
A lethal bomb blast in Algeria, like Nigeria a member of the Organization of Petroleum Exporting Countries, added to supply worries. Also, all of Mexico's four oil loading ports were closed due to rough seas in the Gulf of Mexico and powerful winds on the Pacific coast, raising short-term concerns about Mexico's 1.7-million-barrel-a-day oil export flow.
"It's just a confluence of factors that got it revved up," said Jim Ritterbusch, president of Galena, Ill.-based oil trading advisory service Ritterbusch and Associates.
Complicating supply considerations, U.S. crude inventories are expected to decline in weekly data out Thursday at 10:30 a.m. EST.
Analysts surveyed by Dow Jones Newswires on average forecast crude stockpiles to have fallen by 1.7 million barrels in the week ended Dec. 28.
"That will be the seventh week in a row," said Rick Mueller, senior oil analyst at Energy Security Analysis Inc. in Boston. "That suggests a tightening market. It should be supportive for prices."
Analysts polled expect gasoline stockpiles to have grown by 1.3 million barrels, while stocks of distillate, which includes heating oil and diesel fuel, are predicted to have fallen by 600,000 barrels.
The rate of refinery use is seen growing by 0.4 percentage point to 88.5% of capacity.
Contributing to crude's climb were investment funds rebalancing their portfolios at the start of the year and weakness in the dollar against the euro and yen. The 2 p.m. EST release of the Federal Open Market Committee's most recent monetary policy meeting pointing to another cut to the federal-funds rate seemed to give crude a last minute boost late in the pit session, analysts said.
A cold snap in the Northeast, the world's largest heating oil market, also assisted oil prices. Front-month February heating oil rose 9.10 cents, or 3.4%, to $2.7404 a gallon, also a record for a front-month contract.
February reformulated gasoline blendstock, or RBOB, rose 7.81 cents, or 3.1%, to $2.5689 a gallon. That was a record settlement for front-month RBOB, which began trading in October 2005 and took over as the benchmark gasoline contract this year. Unleaded gasoline futures, which no longer trade on Nymex, reached a record intraday high of $2.92 on Aug. 31, 2005, and settled at a record $2.6145 the same day.
NEW YORK, Jan 2, 2008 (Dow Jones Newswires)
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Rooftop Solar Now 4th Largest Source of Electricity in Australia
- US Confirms Reimposition of Oil Sanctions against Venezuela
- EU, Industry Players Ink Charter to Meet Solar Energy Targets
- Analyst Says USA Influence on Middle East Seems to be Fading
- Russian Ships to Remain Banned from US Ports
- Brazil Court Reinstates Petrobras Chair to Divided Board
- EIB Lends $425.7 Million for Thuringia's Grid Upgrades
- Var Energi Confirms Oil Discovery in Ringhorne
- Seatrium, Shell Strengthen Floating Production Systems Collaboration
- An Already Bad Situation in the Red Sea Just Got Worse
- What's Next for Oil? Analysts Weigh In After Iran's Attack
- USA Regional Banks Dramatically Step Up Loans to Oil and Gas
- EIA Raises WTI Oil Price Forecasts
- How Likely Is an All-Out War in the Middle East Involving the USA?
- Venezuela Authorities Arrest Two Senior Energy Officials
- Namibia Expects FID on Potential Major Oil Discovery by Yearend
- Oil Markets Were Already Positioned for Iran Attack
- Is The Iran Nuclear Deal Revival Project Dead?
- Petrobras Chairman Suspended
- Oil and Gas Executives Predict WTI Oil Price
- An Already Bad Situation in the Red Sea Just Got Worse
- New China Climate Chief Says Fossil Fuels Must Keep a Role
- Oil and Gas Execs Reveal Where They See Henry Hub Price Heading
- Equinor Makes Discovery in North Sea
- Macquarie Strategists Warn of Large Oil Price Correction
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- Standard Chartered Reiterates $94 Brent Call
- Chevron, Hess Confident Embattled Merger Will Close Mid-2024
- Analysts Flag 'Remarkable Feature' of 2024 Oil Price Rally