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Crude oil prices on the New York Mercantile Exchange recently surpassed $79 per barrel for only the second time in history.
Two years ago crude oil surged past the $80 mark on its way to $145 a year later. The increase in oil prices and the stock market, which cleared the 10,000 mark, contributed to an advance in equities from Shanghai to London.
The dollar weakened, boosting the appeal of commodities. November contracts expired on Oct. 20. However, some analysts predict that the recovery of the worldwide economy may not be complete, yet. Some speculate that there will be a another economic downturn next year that will create an oversupply of crude oil. Meanwhile, natural gas prices rebounded last week with the NYMEX 30-day price reaching $4.91. Natural gas traded on the Houston Ship Channel sold for $4.23. Cold weather hit the nation in early October, and some weather forecasters predicted a colder winter in parts of the country. The U.S. northeast may have the coldest winter in a decade because of a weak El Niño, a warming current in the Pacific Ocean, according to Matt Rogers, a forecaster at Commodity Weather Group. “Weak El Niños are notorious for cold and snowy weather on the eastern seaboard,” Rogers said in a Bloomberg Television interview from Washington. “About 70 percent to 75 percent of the time a weak El Niño will deliver the goods in terms of above-normal heating demand and cold weather. It’s pretty good odds.”
Warming in the Pacific often means fewer Atlantic hurricanes and higher temperatures in the U.S. northeast during January, February and March, according to the National Weather Service. El Niño occurs every two to five years, on average, and lasts about 12 months, according to the service. Hedge-fund managers and other large speculators increased their net-long positions – or bets that prices will rise – in New York heating oil futures in the week ended Sept. 22, according to U.S. Commodity Futures Trading Commission data Sept. 25. “It could be one of the coldest winters, or the coldest, winter of the decade.” Rogers said. Alex Mills is president of the Texas Alliance of Energy Producers, which is the largest oil and gas association in the nation. |
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