Light, sweet crude oil prices climbed more than $1/bbl on the New York market Jan. 21, reaching a trading session high of $30.25/bbl before settling at $29.53/bbl. The momentum continued with crude prices rallying above $31/bbl in early trading on Jan. 22.
Cold weather helped support oil prices as did comments from a European banking official regarding the possibility of more economic-stimulus measures, analysts said.
European Central Bank Pres. Mario Draghi suggested in a speech that he is prepared to take economic stimulus steps during March.
Meanwhile, Japanese and US central banks also face pressure to keep interest rates low or expand money policies in response to unstable stock markets, low oil prices, and slow growth in China and other nations.
“We don’t give up,” Draghi told reporters at a news conference in Frankfurt Jan. 21. “We are not surrendering in front of these global factors.”
Olivier Jakob, Petromatrix analyst, said, “Draghi gave the talk of potential more QE [quantitative easing] at the next ECB meeting, and markets like the sound of QE.”
Separately, investors are watching to see if economically struggling Venezuela will default on its $120 billion pile of foreign debt.
A default in 2016 “is becoming increasingly difficult to avoid,” Barclays Capital economist Alejandro Arreaza said in a report suggesting that Venezuela likely will need to use most of its oil income this year to meet obligations, including sovereign debt.
Venezuela President Nicolas Maduro recently emphasized the country’s intention to honor its debts, but growing numbers of analysts and economists question Venezuela’s ability to do so.
The NYMEX natural gas contract for February gained 2¢ to a rounded $2.14/MMbtu. The Henry Hub gas price was $2.20/MMbtu on Jan. 21, up 6¢.
Analysts said gas futures rose on cold weather. Meanwhile, the US Energy Information Administration estimated gas in underground storage at 3.297 tcf as of Jan. 15, which was a net decline of 178 bcf from the previous week. Stocks were 629 bcf higher than last year at this time and 473 bcf above the 5-year average of 2.824 tcf, the Gas Storage Report said.
Heating oil for February delivery gained 3¢ to a rounded 90¢/gal. The price for reformulated gasoline stock for oxygenates blending for February was up 1¢ to a rounded $1.03/gal.
The March ICE contract for Brent crude climbed $1.37 to settle at $29.25/bbl on Jan. 21, and the April contract rose $1.17 to $29.79/bbl. The ICE gas oil contract was $259/tonne on Jan. 21, up $11.75.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for Jan. 21 was $22.89/bbl, up 41¢.
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