Suez Weekly Market Monitor
ERCOT power started the week on a slight decline. Mid-week, prices rebounded but soon fell of again as prices finished close to or at their 52-week low.
Northeast power prices also saw gradual declines this week as power prices fell to new 52-week lows across all reported zones.
PJM power in both the western and eastern regions saw power price follow the same gradual decline as the other reported power indices.
Natural Gas Market
Natural gas prices saw a gradual decline through the week.
Natural Gas Storage: Gas in Storage Decreased 11 Bcf
Working gas in storage was 3,406 Bcf as of Friday, December 1, 2006, according to EIA estimates.
Oil Falls on Doubts That OPEC Will Reduce Global Oil Oversupply
Crude oil fell amid skepticism that a surplus in global supply would be significantly reduced even if OPEC decides to cut production at a meeting this week in Nigeria.
The Organization of Petroleum Exporting Countries, the producer of 40 percent of the world's oil, meets in Nigeria on Dec. 14 to consider reducing output for the second time in three months. Crude oil supplies in the U.S., the world's largest consumer, have grown 5.3 percent in the last year.
Crude oil for January delivery fell as much as 70 cents or 1.1 percent to $61.33 a barrel, the lowest intraday price since Nov. 29 on the New York Mercantile Exchange. The contract traded at $61.41 a barrel at 2:08 p.m. in London. Brent crude oil on the London-based ICE Futures Exchange was down 36 cents to $61.84.
“People are expecting that OPEC will cut, but it won't bite quite so hard because of a lack of compliance” by some of the group's 11 member nations, said Christopher Bellew, a broker with Bache Financial Ltd. in London.
OPEC production dropped by only 550,000 barrels a day in November, according to a Bloomberg survey last week of oil companies. In October, the group agreed to cut output by 1.2 million barrels a day, starting in November. The group will review its quota policy at this week's meeting.
A month after OPEC was supposed to start pumping less oil, U.S. stockpiles held 339.7 million barrels on Dec. 1, 14 percent more than the five-year average for the period, the Energy Department reported Dec. 6.
“It's always very dangerous to announce another cut before the first has been fully implemented, and too many cuts for the first quarter may leave OPEC short of ammunition in the second,” said Frederic Lasserre, head of commodities research at Paris- based Societe Generale.
“OPEC may say that they agree in principle to cut but that they'll leave the precise timing” to a later date, he said.
With U.S. oil prices at about $62 a barrel, the group will probably leave quotas unchanged, said Andrew Harrington, a commodities analyst at Australia & New Zealand Banking Group Ltd. in Sydney.
OPEC President Edmund Daukoru, who is also the Nigerian oil minister, said last week he's “not comfortable” with current oil prices and Nigeria will seek a cut at meeting in Abuja. Venezuela and Iran have also endorsed a reduction.
On Dec. 8, oil in New York fell 46 cents, or 0.7 percent, to $62.03, the lowest close since Nov. 28, on forecasts that warmer weather will move across most of the U.S., curbing demand for heating oil. After falling 2.2 percent last week, prices are about 0.7 percent higher than a year ago.
Merrill Lynch & Co., the world's second-largest securities firm by revenue, lowered its average 2007 oil price forecast to $60 a barrel from $65 on slowing demand and growing non-OPEC production.
“Crude oil inventories are already at very high levels and storage space is running out,” Merrill's head of commodities research Francisco Blanch said today in a research report.
OPEC wants to avoid a surge in supplies that would cause prices to drop after winter ends in the Northern Hemisphere.
“The market is out of balance significantly,” Saudi Arabian Oil Minister Ali al-Naimi told reporters in Cairo on Dec. 1. He said 100 million barrels needed to be removed from the market.
OPEC's crude basket price, a weighted average of 11 blends produced by the group's members, fell 3 cents to $58.63 a barrel on Dec. 11, the most recent update available.
|Home :: Archives :: Contact||
July 5th, 2022
© 2022 321energy.com