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OIL FUTURES: Nymex Crude Tops $55 On Cold, OPEC Cuts January 26, 2007

Posted by notapundit in Economic News.

NEW YORK (Dow Jones)–Crude oil futures rallied all day and finished above $55 a barrel Friday as freezing temperatures across the East Coast raised the prospects of increased heating fuel consumption.

Forecasters predicted below-normal temperatures gripping the region to continue into at least the first week of February after a respite this weekend.

Private forecaster Frontier Weather said temperatures from the Great Lakes to the Atlantic will likely average 12 to 16 degrees below normal through the first week of February, boosting heating oil demand.

“The weather forecasts started the ball rolling,” said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. “Even though winter is getting off to an awfully late start, these types of weather patterns are known to sometimes last into March, and all the extra supply we built up may be lost further down the road.”

The March crude contract on the New York Mercantile Exchange jumped $1.19 to $55.42 barrel, the highest settlement price in two weeks.

The March Brent contract on ICE Futures gained $1.17 to $55.29 a barrel.

February heating oil climbed 4.23 cents to $1.5914 a gallon.

February RBOB gasoline rose 3.93 cents to $1.4834 a gallon.

“Part of the rally was psychological with the cold weather, and you had the Lloyds reports that the OPEC cuts are pretty significant,” said Edward Meir, an analyst at brokerage Man Financial in New York.

Tanker tracker Lloyds MIU reported that crude oil exports from the Organization of Petroleum Exporting Countries fell to below 23 million barrels a day in December from under 24 million barrels a day in November.

The tanker tracker also said OPEC crude exports in November were down 700,000 barrels a day from October levels.

The report eased lingering questions over OPEC’s adherence to an October agreement to cut output by 1.2 million barrels a day from November.

Independent surveys show the cartel has implemented just half of the promised cut. Oil Movements, another closely followed tanker tracker, said Thursday that seaborne exports from OPEC countries are expected to rise by 270,000 barrels a day to 24.56 million barrels a day in the four weeks ending Feb. 10.

But OPEC President Mohammed al-Hamli said this week that OPEC was “happy” with the level of compliance with the October agreement.

He added that OPEC will go ahead with a December agreement to remove an additional 500,000 barrels a day of oil from the market beginning Feb. 1.

“I think the cuts are bigger than we think,” Flynn of Alaron said.

Following are prices for selected Nymex and ICE contracts and their comparison to values at the prior day’s settlement. Highs and lows include levels hit in overnight trade.

Prices for crude oil are in dollars a barrel and the change is in cents; prices for Nymex products are in cents a gallon and the changes are in points; prices for ICE gasoil are in dollars a ton and the change is in cents.

Nymex Prices:
Contract Settle Change Vs Low High
Mar crude oil 55.42 +119 54.20 55.52
Apr crude oil 56.25 +113 55.17 56.32
Feb heating oil 159.14 +423 155.25 159.45
Mar heating oil 160.14 +420 156.01 160.40
Feb RBOB 148.34 +393 144.80 148.50
Mar RBOB 151.50 +409 148.04 151.66

ICE Prices:
Contract Settle Change Vs Low High
Mar ICE Brent 55.29 +117 54.16 55.37
Apr ICE Brent 55.98 +119 54.89 56.03
Feb gasoil 494.00 -175 486.25 497.00
Mar gasoil 498.25 -150 490.25 500.75

By Masood Farivar, Dow Jones Newswires


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