Light, sweet crude oil prices soared by more than $2/bbl on the New York market Jan. 22, settling at $32.19 for March delivery while Brent crude oil prices climbed by nearly $3/bbl on the London market to settle at $32.18/bbl.
Analysts attributed the jump in US oil futures to a blizzard forecast for the East Coast. Meanwhile, cold weather swept across much of the Southeast, Mid-Atlantic, and Northwest. Dropping temperatures across much of the nation drove up heating oil prices by nearly 10¢/gal.
Both light, sweet crude and Brent crude contracts posted their biggest single-day percentage gains since August 2015. US oil futures were up 9% for the day while the Brent crude future price rose 10% Jan. 22 from the previous day. The gains came after oil prices tumbled more than 50% during the past 18 months.
Goldman Sachs Group Inc. said crude prices are at a price level that is apt to create “real fundamental change” in oil markets. Analysts Jeffrey Currie, Damien Courvalin, Michael Hinds, and Abhisek Banerjee wrote a note to clients saying industry adjustment is crucial.
“We continue to believe this transitional inflection phase is likely to last beyond first-half 2016 and will be characterized by a trendless market with substantial price volatility, potentially between the two stress points of $20/bbl and $40/bbl,” they said.
The March crude oil contract on the New York Mercantile Exchange gained $2.66 to settle at $32.19/bbl on Feb. 22,the the highest close for the front-month contract since Jan. 8. The March contract was up $2.68 to settle at $33.51/bbl.
The NYMEX natural gas contract for February edged up a fraction of a penny to remain at a rounded $2.14/MMbtu. The Henry Hub gas price held at $2.20/MMbtu on Jan. 22, unchanged from the previous trading day.
Heating oil for February delivery gained nearly 10¢ to a rounded $1/gal. The price for reformulated gasoline stock for oxygenates blending for February was up 5¢ to a rounded $1.08/gal.
The March ICE contract for Brent crude climbed $2.93 to settle at $32.18/bbl on Jan. 22, and the April contract rose $3.05 to $32.84/bbl. The ICE gas oil contract was $284/tonne on Jan. 22, up $25.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Jan. 22 was $25.50/bbl, up $2.61.
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