Crude prices finished slightly higher, but briefly dipped below $100 a barrel for the first time since early April and suffered a loss of 4.8% for the week. Damage to refineries in the region may reduce demand for oil, analysts said.
“Oil wasn’t an issue,” said Darin Newsom, DTN senior analyst. “In fact, it could almost be viewed as bearish due to drilling platforms likely being undamaged for the most part, [and] crude-oil stocks could build if refineries are shut down for any length of time.”
Natural gas for October delivery tacked on 11.8 cents to close at $7.366 per million British thermal units on the New York Mercantile Exchange. Earlier, it rose as high as $7.67 in electronic trading on Globex, its strongest intraday level in two weeks. But it still lost a total of 1.1% for this week.
Despite the threat of a major hurricane and OPEC’s move to tighten spigots, oil prices have fallen back sharply. Alaron Trading’s Phil Flynn discusses how oil prices could spike if Ike wallops installations in the Gulf. (Sept. 12)
Prices for oil products headed higher for much of the trading session, but pared gains by the close. October reformulated gasoline retreated from a high $2.86 a gallon and closed at $2.7696, up 2.1 cents. It was up 3.1% for the week.
October heating oil closed at $2.9391 a gallon, up 0.8%, or 2.4 cents for the day, but down 1.5% for the week.
The price volatility “is a good reflection of the uncertainty in the market,” said Newsom.
“On its own, crude oil remains bearish,” he said. “The support in the energy complex comes from the threat of smaller inventories — a short-term threat most likely.”
October crude futures closed at $101.18 a barrel, up 31 cents on Nymex. They were 4.8% lower for the week.
Prices dipped to a low of $99.99 Friday. Some analysts have said that a drop below the key $100-per-barrel mark could cause oil prices to sink toward $80. See Commodities Corner.
October crude continued lower late Friday. It was at $100.81 on Globex as of 3:15 p.m. EDT Friday.