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MARKET WATCH: Energy prices mixed in directionless markets

Oil & Gas Journal

Sam Fletcher
Senior Writer

HOUSTON, Feb. 18 -- Oil futures prices were volatile Feb. 15, but closed essentially flat in the New York market, giving up earlier large gains as traders locked in profits from recent 10% price rally.

Olivier Jakob at Petromatrix, Zug, Switzerland, noted that crude futures managed last week to hold onto the momentum gained at the end of the previous week to climb above $95/bbl. Crude is still trading near record highs, "but ever since it entered the $85-100/bbl range, open interest has started to decline," Jakob said.

Still, among commodity markets in the week ended Feb. 15 the energy sector was the main source of positive returns with crude oil and heating oil gaining over 7%, said Adam Sieminski, chief energy economist, Deutsche Bank AG, New York. "A cold spell in the US, geopolitical pressures this time in Venezuela, and a relatively bullish set of Department of Energy inventory figures contributed to the latest rally in crude oil prices. This occurred despite the International Energy Agency revising down its estimate for global oil demand for 2008 by 200,000 b/d to 1.6 million b/d," Sieminski said.