NEW YORK (TheStreet) -- Crude oil prices rebounded Friday after yesterday's bloodbath as supply disruptions in the U.S. and Iran and much brighter-than-expected domestic jobs news injected life into the futures market and attracted bargain hunters.
Brent crude oil for September delivery rose $2.12 to settle at $109.37 a barrel on news of a pipeline explosion in Iran and a fire at a Memphis, Tenn., refinery. West Texas Intermediate light sweet crude oil dipped in and out of the red on a mixed economic outlook before finally settling 25 cents higher at $86.88 a barrel thanks to
better-than-expected jobs news. The Labor Department said 117,000
jobs were added to the U.S. economy in July, topping the average economists' expectation of 84,000 additional
jobs, according to Briefing.com. "The barrage of poor economic data and the corresponding vicious selloff across markets has left WTI crude disorientated," said Summit Energy analyst Matt Smith. "We're just trying to get to the weekend for some respite, and then reassess the situation on Monday." The rise in Brent crude prices Friday was fueled by news that there was a fire at
Valero Energy's(VLO) Memphis refinery, which led to the shutdown of two crude oil production units. The refinery has a production capacity of 195,000 barrels a day according to Bloomberg data. Any significant price declines from current levels may find buying especially in Brent as we really have not replaced the high quality crude from Libya in the market," said optionsXpress senior commodity analyst Mike Zarembski. Natural gas prices for September delivery settled flat at $3.941 per million British thermal units on bearish weather forecasts and continued storage builds recorded from last week. "We sliced through the psychological level of $4 far too easily, which has really set a further bearish tone for prices today," said Smith. The Summit Energy analyst expects more moderate temperatures in the central U.S. and Northeast next week and notes that Tropical Storm Emily has been dissipating, lowering air-conditioning demand and removing the threat of disruptions in natural gas operations in the Gulf of Mexico region. "There is little impetus for prices to push on too much higher from here on current fundamentals," said Smith. Zarembski agreed, saying "without any major increase in industrial demand it will be hard for front month futures to move above $5." Still, Hamza Khan, an analyst with The Schork Group, said that he finds it "hard to stomach" natural gas prices below $3.80 especially amid recent reports saying that natural gas shale plays have not been as productive as originally thought and that the U.S. supply glut is a bit less extreme than previously thought, with some estimates off by 100%. Oil and gas stocks ended in mixed territory.
EOG Resources(EOG) rose 4.1% to end at $95.93;
Devon Energy(DVN) fell 2.5% to $69.86;
Chevron(CVX) added 0.8% to $97.61;
Newfield Exploration(NFX) tumbled 4.9% to $55.54;
Hess(HES) retreated 2.4% to $59.86;
Occidental Petroleum(OXY) fell 0.5% to $87.34; and
Cnooc(CEO) was lower by 2.3% to $199.36.
-- Written by Andrea Tse in New York. >To contact the writer of this article, click here:
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Source: http://feeds.thestreet.com/~r/tsc/feeds/rss/latest-stories/~3/7onbHbJWHNI/oil-prices-rebound-on-shortage-concerns.html
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