Oil Prices - WTI
The front month contract for West Texas Intermediate crude oil (WTI) ended the week at US$75.17 a barrel, up US$1.35 on last week’s close.
Oil prices in the US moved in tandem with the stock market last week. Falls in equities reflect fears of lower economic activity ergo lower demand for energy. When US markets snapped back on Friday the oil price too clawed back some of the week’s earlier losses.
It helped that US Federal Reserve Chairman Ben Bernanke in a much anticipated speech managed to soothe some concerns by committing the Bank to take whatever measures might be necessary to boost the US economy.
The oil price was also impacted by a slightly weaker US dollar and by data showing a decline in US weekly claims for unemployment benefits.
But we are now in the shoulder season for northern hemisphere energy use. There is less demand for energy for cooling as the onset of autumn brings more moderate temperatures after an unusually hot summer and the US driving season is all but over.
Demand for winter heating has yet to kick in.
And thus far we have not seen any threatening hurricanes in the Gulf of Mexico. So much for some weather forecasts of a hyper active hurricane season due to the abnormally high water temperatures in the GOM
Oil Prices - Tapis
Tapis, an Asian marker crude for Australasian producers, closed the week at US$78.87 down US$0.42 on the week. For Australian producers that represented an oil price of A$89.62 a barrel at US$0.88 cents to the Australian dollar.
US Natural Gas Price
The price of the front month natural gas contract (the Henry Hub benchmark) in the United States ended Friday at US$3.70 an mcf down 42 cents on last week’s close. That was despite a lower than expected injection into storage. A Bloomberg survey had analysts divided on the likely movement of US gas prices in September.
This is the first time the near month contract ended a week below US$4.00 an mcf since May. The Henry Hub spot price also finished lower at US$3.74 an mcf.
Lower US natural gas prices are not good news for those Aussie juniors in the US like Petsec Energy and Imperial Corporation with more gas in their production mix than oil.