July NYMEX touches fresh high at $129.29/bbl

21 May 2008 07:25  [Source: ICIS news]

SINGAPORE (ICIS news)--Front-month July NYMEX crude rose $0.31 to an intra-day high of $129.29/bbl (€82.75/bbl) on Wednesday, backed by worries of tight global crude oil and oil products supplies, speculative trades and analysts’ price forecasts.

The latest surge came after OPEC president Chakib Khelil said on Tuesday that there would be no increase in output before OPEC’s next meeting on 9 September despite an anticipated rise in demand from the US summer driving season starting this weekend.

Even Saudi Arabia's promise last week of an additional 300,000 barrels of crude/day could not alleviate the situation.

High forecasts for crude oil prices by Texas oil man T Boone Pickens and investment banks, as well as record NYMEX heating oil and gasoline prices due to tight diesel fuel supplies also contributed to the rise in prices.

Adding to the volatility and speculative trade was the expiration of the June NYMEX contract on 20 May 2008 at a record settlement of $129.07/barrel.

Naphtha rose in tandem as it opened stronger early Wednesday despite the lack of trade in Asia.

Price indications for the first half of July contract were pegged at $1,062.50-1,065.50/tonne CFR (cost and freight) Japan while second half July contract prices were at $1,061.50-1,064.50/tonne and first half August were at $1,060.50-1,063.50/tonne.

In the aromatics sector, benzene prices touched a 12-year high during Tuesday’s trading, with a deal heard at $1,250/tonne FOB (free on board) Korea for July loading.

On Wednesday morning, prices surged another $15/tonne on the overnight hike in crude values, said traders.

Toluene prices also were assessed at new record high levels of $1,180-1,190/tonne FOB Korea, $15-20/tonne higher than Tuesday’s close.

Offers for July loading were heard at $1,200/tonne FOB Korea while bids were heard at $1,180/tonne FOB Korea.

The plastics sector was also affected with polypropylene (PP) prices in China expected to reach a fresh 10-year high of $1,700/tonne by the end of May or early June on surging feedstock costs and short supply, Asian producers said.

One PP producer added that he expected crude to hit $135/tonne in June or July due to the US driving season, while naphtha would rise to $1,200/tonne CFR Japan leading to a rise in propylene feedstock.

Desmond Chia, Chow Bee Lin and Mahua Chakravarty contributed to this story

($1=€0.64)

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By: Serene Cheong
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