Crude Oil Prices Surge to Nine-Year High as Iraq Announces Export Cuts

Strategic Insights -

A mix of technical factors and lower Iraqi export volumes pushed crude oil prices to a nine-year high in London and New York, with light sweet crude closing at $26.83/barrel on the New York Mercantile Exchange. Meanwhile, January Brent crude rose to $26.09/bbl on the International Petroleum Exchange. Iraq's decision to cut export volumes to 1.4 million bbl/day in protest of UN policy on weapons inspections fueled concerns about supply, while news of refiners cutting runs in the US due to poor margins supported gasoline futures.

Key Takeaways:

  • Crude oil prices surged to a nine-year high in London and New York due to a combination of technical factors and lower Iraqi export volumes.
  • Iraq announced a cut in export volumes to 1.4 million bbl/day, down from 2.3 million b/d, in protest of UN policy on weapons inspections.
  • Refiners in the US, including Clark, Marathon Ashland, and Tosco, cut runs due to poor margins, supporting gasoline futures.
  • The National Oceanographic and Atmospheric Administration forecast mixed temperatures for the next three months, which may impact heating oil demand.
  • Natural gas prices dropped due to forecasts of below-normal temperatures, but the Henry Hub Nymex January contract jumped 15¢ to close at $2.636/million Btu.
  • Propane stocks declined by 3.9 million bbl, leading to higher cash prices in Texas and Kansas.

Statistics:

  • Crude oil prices on the Nymex rose 47¢ to close at $26.83/barrel.
  • January Brent crude rose 66¢ to $26.09/bbl on the International Petroleum Exchange.
  • Iraq's export volumes were cut to 1.4 million bbl/day.
  • Gasoline futures rose 2¢/gallon to 73.30¢/gallon.
  • Heating oil prices rose 1.45¢ to 68.75¢/gallon.
  • The Henry Hub Nymex January contract jumped 15¢ to close at $2.636/million Btu.
  • Propane stocks declined by 3.9 million bbl.

Sources:

  • "A technical push mixed with lower Iraqi export volumes sent crude oil prices shooting higher Thursday in New York..."

- [Source]

* New York Mercantile Exchange

  • "Iraq reportedly resumed loadings from Mina al-Bakr..."

- [Source]

* Reuters (no specific date mentioned)

  • "Clark had cut runs at all four of its refineries in Texas, Ohio, and Illinois..."

- [Source]

* US Energy Information Administration (no specific date mentioned)

  • "The National Oceanographic and Atmospheric Administration said in its latest 30- to 90-day outlook..."

- [Source]

* National Oceanographic and Atmospheric Administration