Oil Prices Rally on OPEC Rumors, Trading Uncertainty

Petroleum and petroleum products prices increased on March 25, 1994, on speculation that the Organization of Petroleum Exporting Countries (OPEC) might reduce production by 4% to 6%. However, dissension within the cartel made it more likely that the 24.52 million barrels per day (b/d) quota would be rolled over. This led to a modest increase in crude oil, heating oil, and natural gas futures, but a decline in unleaded gasoline prices due to excess nominations on the Williams' Explorer pipeline.

Key Takeaways:

• Crude oil futures for May delivery rose 5* to $15.13/barrel on the New York Mercantile Exchange (Nymex).
• April No. 2 heating oil jumped 1.07* to close at 46.28* per gallon.
• Unleaded gasoline futures for April delivery declined 0.18* to 46.48* per gallon due to delayed or halted shipments on the Williams pipeline.
• May natural gas futures rose a modest 0.022* to close at $2.072/million British thermal units (MMBtu) on concerns about storage.
• Major oil companies raised prices across the board, with unleaded regular gasoline rising 0.05* to 51.95* per gallon, heating oil increasing 0.04* to 50.11* per gallon, and low-sulfur diesel increasing 0.04* to 54.67* per gallon.
• The OPEC rumors contributed to a 5* boost to West Texas Intermediate (WTI) oil futures for May delivery.
• The 24.52 million b/d production ceiling was expected to be rolled over due to dissension within the cartel.

Statistics:

• Crude oil futures for May delivery: $15.13/barrel (Nymex)
• April No. 2 heating oil: 46.28* per gallon
• Unleaded gasoline futures for April delivery: 46.48* per gallon
• May natural gas futures: $2.072/million Btu (MMBtu)
• West Texas Intermediate (WTI) oil futures for May delivery: $15.13/barrel
• 24.52 million b/d production ceiling

Sources:

• The Oil Daily
• Computer Petroleum Corp.
• New York Mercantile Exchange (Nymex)
• International Petroleum Exchange (London)
• Organization of Petroleum Exporting Countries (OPEC)