Are you sure?

Oil, coal prices rally on supply jitters

Energy prices rallied across the board this week, with oil surging to a one-month high on worries, that Venezuela could cut exports to the United States.

Natural gas prices rose on both sides of the Atlantic over the past two days, boosted by cooler weather which prompted consumers to turn up their central heating. Coal edged higher on production problems in South Africa, one of the world’s top exporters. European diesel and heating oil prices also increased, boosted by the stronger oil market and tight supplies. Supplies are tight due to the cold weather and low stocks following extensive refinery maintenance in the autumn. While diesel and heating oil inventories rose last week in the Amsterdam Rotterdam Antwerp refining hub, they remain around 40% below levels last year. Oil jumped above $96 a barrel on Friday as investors focused on the possibility, however remote, of Venezuela halting supplies to the United States, the world’s top consumer.

The South American country, one of the largest crude exporters to the United States, cut shipments to Exxon Mobil earlier this week after the US oil major won court orders to freeze over $12 billion of Venezuela’s assets. Large oil producers in the Middle East have already assured Washington that they could compensate for a supply disruption if Caracas slows exports as a result of the escalating row over nationalization of Exxon assets in Venezuela. Oil prices have fallen in recent weeks over worries over slowing demand in the United States due to economic woes. US natural gas futures rose nearly 5% on Thursday on the back of colder weather forecasts and weekly data showing a fall in stocks.

British gas prices, which serve as a benchmark for the continent, have been volatile this week. Before Friday’s gains, UK gas prices had dropped sharply mid-week after Russia withdrew its threat to cut gas exports to Ukraine, a move that could have hit supplies to Europe. The presidents of Russia and Ukraine on Tuesday settled a row over gas debts, minutes before a Moscow-imposed deadline for Kiev to pay up or face supply cuts. Coal prices rallied on production problems in South Africa and elsewhere, which have tightened global supplies. Technical problems at South Africa’s Richards Bay Coal Terminal are set to hit exports from the port. (Reuters)