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Petroleum

Crude Oil Futures Rally on Rising Tension with Russia

Strategic Insights

— 2 min read

The crude oil market saw a surprising rebound on Friday as traders responded to increased tensions between Russia and NATO, combined with mildly supportive comments from the International Energy Agency. Despite a three-day slide, May light, sweet crude futures on the New York Mercantile Exchange (Nymex) surged to as high as $16.84/bbl, eventually settling at $16.57/bbl, up 74 cents for the day. The rally was fueled by reports of Russian President Boris Yeltsin's aggressive rhetoric towards NATO, as well as the IEA's prediction that OPEC cuts could significantly impact global supply in the last three quarters of the year.

Key Takeaways:

  • Crude oil futures rallied on Friday, surging to $16.84/bbl, as traders responded to increased tensions between Russia and NATO.
  • May Nymex crude gained 74 cents on the day, bucking a three-day slide.
  • The rally was fueled by reports of Russian President Boris Yeltsin's aggressive rhetoric towards NATO, as well as the IEA's prediction of OPEC cuts impacting global supply.
  • May North Sea Brent crude futures on the International Petroleum Exchange also regained their footing, climbing 65 cents on the day to close at $14.86/bbl.
  • May Nymex heating oil advanced 1.62 cents to settle at 42.46 cents/gallon, while gasoline futures trailed behind, losing 2.30 cents on the week.
  • The 3-2-1 crack spread surrendered 70 cents for the week to sit at $3.60/bbl on Friday.
  • Dismal demand led to a small stock draw last week, but improved demand is expected to drive a recovery.
  • Natural gas futures prices inched up due to expectations of decent weather-based demand.

Statistics:

  • May Nymex crude gained 74 cents on the day to close at $16.57/bbl.
  • May North Sea Brent crude futures on the International Petroleum Exchange climbed 65 cents on the day to close at $14.86/bbl.
  • May Nymex heating oil gained 1.62 cents to settle at 42.46 cents/gallon.
  • Gasoline futures lost 2.30 cents on the week.
  • The 3-2-1 crack spread surrendered 70 cents for the week.
  • Natural gas futures prices gained 5.8 cents on the week.

Sources:

  • "Reversing a three-day slide, crude oil futures in New York pushed close to $17/bbl Friday" - Uncited article
  • "Russian President Boris Yeltsin stepped up the war of words with NATO over the conflict in Yugoslavia" - Uncited article
  • "IEA reported in its latest oil report that OPEC cuts could take a 'significant' bite out of world supply in the last three quarters of the year" - "see story, p.5"

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