Futures Market Responds to Opec Comments With New Contract Highs

Strategic Insights -

The energy market experienced new highs on Thursday as crude and heating oil prices continued to rise. The upsurge was fueled by Opec's indication that additional supplies would be delayed, coupled with reports of low US inventories. This led to a significant increase in prices, with September crude reaching a fresh contract high of $32.75/bbl on the New York Mercantile Exchange (Nymex). Additionally, Opec President Ali Rodriguez's statement that the cartel has no immediate plans to increase production further propelled prices upwards.

Key Takeaways:

  • September crude price increased by 14¢ on the Nymex to finish at $31.94/barrel, reaching a new contract high of $32.75/bbl earlier in the day.
  • Opec President Ali Rodriguez stated that the cartel has no immediate plans to increase production, implying that any decision to raise production at the September 10 meeting would rely on a triggered price-band mechanism.
  • The Opec basket exceeded the $28 upper limit of the $22-$28 price band for the third consecutive day, reaching $28.68/bbl.
  • US Energy Secretary Bill Richardson expressed concern over high prices, suggesting that they have been inflated by Opec members.
  • The Petroleum Industries Research Association (PIRA) reported that this fall's refinery maintenance schedule will be the heaviest in 10 years, with the bulk of the downtime in October.

Statistics:

  • September crude price increased by 14¢ to $31.94/barrel on the Nymex.
  • New contract high of $32.75/bbl reached earlier in the day on the Nymex.
  • Opec basket price exceeded $28 upper limit for the third consecutive day, reaching $28.68/bbl.
  • PIRA reported 10-year high refinery maintenance schedule this fall, with the bulk in October.
  • US refinery operating levels reached record high (OD, August 17, p5).
  • Brent prices reached a contract high of $30.77/bbl on the International Petroleum Exchange (IPE).
  • Gasoline inventory levels remained similar to last year's.
  • Spot natural gas prices rose 15-20¢ in trading.

Sources:

  • OPEC (no specific date mentioned in the original text)
  • Venezuelan President Hugo Chavez (no specific date mentioned in the original text)
  • United States Energy Secretary Bill Richardson (no specific date mentioned in the original text)
  • American Petroleum Institute (API) (source cited as: "OD, Aug. 17, p5")
  • Petroleum Industries Research Association (PIRA) (no specific date mentioned in the original text)
  • International Petroleum Exchange (IPE) (no specific date mentioned in the original text)
  • American Gas Association (no specific date mentioned in the original text)
  • Katherine Spector, Andrew Ware (no specific date mentioned in the original text)