Oil Prices Rebound on Short-Covering, Middle East Tensions

Strategic Insights -

Oil prices surged in New York on Friday as traders repositioned themselves in anticipation of potential tensions in the Middle East, supporting petroleum futures in New York. The news that Iraq was opposed to the proposed increase in humanitarian oil sales to $5.2 billion per 180 days boosted the market, with March Nymex light, sweet crude futures reaching an intraday high of $17.00/bbl before settling at $16.70/bbl, up 12 cents. However, genuine buying interest was moderate, and the front-month contract came down from its high.

Key Takeaways:

  • The market was supported by short-covering on Friday, with March Nymex light, sweet crude futures reaching an intraday high of $17.00/bbl.
  • The news that Iraq was opposed to the proposed increase in humanitarian oil sales to $5.2 billion per 180 days boosted the market.
  • March Nymex crude futures settled at $16.70/bbl, up 12 cents.
  • Open-interest numbers from Thursday confirmed that most of last week's short-covering was taken care of before Friday.
  • The trans-Atlantic spread widened to $1.40/bbl, and front-month IPE Brent fell 66 cents/bbl on the week.
  • Benchmark West Texas Intermediate is likely to move closer to $15/bbl over the next few months, according to crude oil analyst Ken Miller of Purvin & Gertz Inc.
  • Nymex gasoline futures held on to substantial gains, with March Nymex gasoline gaining 0.80 cents to settle at 51.16 cents/gallon.
  • March Nymex heating oil futures managed to reach a session high of 47.20 cents/gallon, but the light trading volume fostered late-day volatility.
  • March Nymex Henry Hub gas futures gained 2.4 cents to settle at $2.359/MMBtu, as early morning profit-taking gave way to light short-covering.

Statistics:

  • March Nymex light, sweet crude futures reached an intraday high of $17.00/bbl and settled at $16.70/bbl, up 12 cents.
  • The trans-Atlantic spread widened to $1.40/bbl.
  • Front-month IPE Brent fell 66 cents/bbl on the week.
  • Nymex gasoline futures gained 0.80 cents to settle at 51.16 cents/gallon.
  • March Nymex heating oil futures reached a session high of 47.20 cents/gallon.
  • March Nymex Henry Hub gas futures gained 2.4 cents to settle at $2.359/MMBtu.

Sources:

  • "Iraq Categorically Opposes $5.2 Billion Humanitarian Oil Sales" (source not explicitly mentioned in the original text)
  • "Nymex Crude Oil Futures" (accessed on [no date])
  • Purvin & Gertz Inc. (no date)
  • International Petroleum Exchange (IPE) (no date)
  • New York Mercantile Exchange (Nymex) (no date)