The Brent crude January contract had shed USD 1.88 at the time of writing, changing hands at USD 45.51/bbl. In New York, the WTI crude front month contract was last seen at USD 45.88/bbl, down USD 2.10 on the previous close.
´´I dread looking at Wall Street tomorrow,´´ Harry Reid, leader of the Democratic majority in the Senate commented the rejected rescue package on Thursday night, according to media reports.
On Thursday, the Brent contract surged USD 4.99 to settle at USD 47.39/bbl following a top trade at USD 48.36/bbl. Similarly, the WTI January product ended the day up USD 4.46 to USD 47.98/bbl after having peaked at USD 49.12/bbl.
Jonathan Kornafel at Hudson Energy Trading said a statement from the International Energy Agency (IEA) that world oil demand would drop in 2008 and 2009 added to traders’ expectations of a large production cut from Opec. “Many traders are expecting the producer nations to contribute a cut of approximately 500,000 barrels per day on top of the 1.5-2.5m cut many expect to see from Opec.”
Furthermore, news that Russia would collaborate with Opec at the cartel`s upcoming meeting in Algeria added to the bullish picture, he said.
Oil increases lift other fuels
The stronger oil prices also pushed other fuel prices upwards on Thursday. In the API 2 coal window, the front quarter ended the day up USD 6.60 at USD 85.85/tonne, whilst the Cal 09 contract climbed USD 6.63 to USD 88.50/tonne.
In the UK gas market, prices rose across the board, with the day-ahead contract on the NBP hub settling at a midprice 3.18 pence above the previous at 63.975 pence/therm. Further out, Q1 09 gained 6.30 pence to 63.50 pence/therm, while the Winter 09 contract ended the day up 5.40 pence at 67.50 pence/therm.
The British Cal 09 contract finished up 5.45 pence at 58.65 pence/therm, while the year-ahead contract on the Dutch TTF hub settled at EUR 22.30/MWh, EUR 1.45 higher than on Wednesday.
In the market for EUA allowances, the benchmark December 08 contract at the ECX, which expires on Monday, ended the day up 49 cents at EUR 14.86/tonne. The corresponding 2009 product gained 60 cents to EUR 15.64/tonne. “It’s a short-lived recovery in an overall long-term downward trend,” said Stefan Kleeberg, head of trading at First Climate.
Source: Montel Powernews
