MARKET WATCH: NYMEX oil price climbs, natural gas price drops

Light, sweet crude oil prices continued gaining on the New York market on June 29 while US natural gas futures touched a 4-week high in early June 29 trading. Gas futures settled 5¢ lower than the previous day, ending a four-session gaining streak.

Before closing at $3.04/MMbtu, gas prices reached a trading session high of $3.12/MMbtu. Gas prices initially rose on a government weekly report showing an injection in US underground gas storage across the Lower 48. But the storage gain was less than anticipated.

The US Energy Information Administration reported working gas in storage at 2.816 tcf as of June 23, up 46 bcf net from the previous week but below analysts’ forecasts for 52 bcf.

EIA’s Weekly Natural Gas Storage Report said stocks were 319 bcf less than at the same time a year ago.

Regarding world oil markets, one analyst issued a research note about the decision earlier this month by Saudi Arabia and the UAE to sever diplomatic ties with Qatar.

Helima Croft, RBC Capital Markets LLC global head of commodity strategy, said, “This month, a wall of worry has washed over the Gulf Cooperation Council due to the economic blockage of Qatar orchestrated largely by Saudi Arabia and UAE. We have therefore raised our risk ratings,” for Saudi Arabia, UAE, Iran, and Qatar.

“Given the severity of the standoff, we are no longer able to completely write off a disruption of energy transit routes, the worsening of regional wars, or even some type of confrontation between Saudi Arabia and Iran,” Croft said.

Separately, Credit Suisse analysts said, “The recent bounce in crude feels more like a technical positioning move than a change in fundamentals or sentiment.”

Societe Generale analysts said the US oil and product inventory report showed “no sign of rebalancing and nothing to indicate any change to the bearish status quo for the global oil markets.”

Energy prices

The August light, sweet crude contract on NYMEX gained 19¢ on June 29 to settle at $44.93/bbl. The September contract was up 21¢ to close at $45.20/bbl.

The NYMEX natural gas price for August declined 5¢ to a rounded $3.04/MMbtu. The Henry Hub cash gas price also dropped 1¢ to $3/MMbtu.

Heating oil futures for July added 1¢ to a rounded $1.44/gal. Reformulated gasoline stock for oxygenate blending for July edged up less than a penny to remain at $1.48/gal.

The Brent crude contract for August on London’s ICE increased 11¢ to $47.42/bbl while the September contract climbed 9¢ to $47.63/bbl. The July gas oil contract gained $8 to $435.50/tonne.

OPEC’s basket of crudes on June 30 was $45.36/bbl, up 88¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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