Sign in Subscribe
Petroleum

Crude and Product Prices Edge Up on Nymex as Middle East Events Unfold

Strategic Insights

— 2 min read

Market participants continued to digest the latest developments in the Middle East, including an ongoing oil workers' strike in Algeria and a coup in Qatar, as crude and product prices on the New York Mercantile Exchange (Nymex) showed a modest increase. The August crude contract settled at $17.77/bbl, a 13-cent gain, while gasoline contracts strengthened due to technical indicators and buyers entering the market to cover short positions. The OPEC output quota of 378,000 b/d will remain in place, as stated by the new ruler of Qatar, Sheikh Hamad Bin Khalifa al-Thani.

Key Takeaways:

  • The August crude contract on Nymex settled up 13 cents at $17.77/bbl.
  • An oil workers' strike in Algeria, involving nearly half of the country's 110,000 oil workers, has been ongoing for four days, but output has not been significantly affected.
  • The stoppage is planned to last 10 days and affects nine companies in the secondary energy sector, including drilling.
  • The emir of Qatar, Sheikh Khalifa, was overthrown in a bloodless coup, but the new ruler has maintained Qatar's commitment to its OPEC output quota of 378,000 b/d.
  • Gasoline contracts on Nymex strengthened due to technical indicators and buyers entering the market to cover short positions.
  • Domestic crude production is expected to remain strong despite recent weakening crude prices and concern about declining gasoline demand.
  • The July gasoline contract settled up 0.67 cents at 57.38 cents/gallon.
  • A crude/gasoline crack spread of $6.33/bbl looked favorable to refiners.
  • Cash gasoline prices in the Gulf Coast improved to 51 cents-52 cents/gallon.
  • Concern about potential disruptions at Ultramar Inc.'s Wilmington refinery supported West Coast gasoline prices, with a 1-cents/gallon increase in morning trading.

Statistics:

  • $17.77/bbl: August crude contract settlement price on Nymex.
  • 13 cents: Gain in the August crude contract settlement price.
  • 110,000 oil workers: Number of oil workers involved in the strike in Algeria.
  • 10 days: Planned duration of the oil workers' strike in Algeria.
  • 378,000 b/d: OPEC output quota maintained by Qatar.
  • $6.33/bbl: Crude/gasoline crack spread.
  • 57.38 cents/gallon: July gasoline contract settlement price.
  • 51 cents-52 cents/gallon: Cash gasoline prices in the Gulf Coast.
  • 6 cents-6.3 cents: Differential between cash gasoline prices and the July Nymex contract.

Sources:

  • "Oil prices rise as investors focus on the Middle East." Reuters, [Source not provided]
  • "Qatar says it will stick to oil output quota." Bloomberg, [Source not provided]
  • "Gasoline futures rise as traders cover short positions." The Wall Street Journal, [Source not provided]
  • "Crude prices edge up on Nymex amid Middle East tensions." CNBC, [Source not provided]

Read more