Crude oil and heating oil advanced to their highest level in 27 months after the Institute for Supply Management’s factory index rose last month, adding to the optimism that the U.S. economic recovery to support this year and consume more fuel. Gasoline and ethanol decreased.
The ISM index for December rose to 57, the highest level since May The Commerce Department reported that construction spending rose in November for the third consecutive Mon
“Optimism is the key for the new year,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “Oil is going to follow, regardless of the S & P 500 does.”
Crude Oil
Crude oil for February delivery rose 17 cents to $ 91.55 a barrel to settle on the New York Mercantile Exchange. Crude has risen 15 percent in the past year.
The Standard & Poor’s 500 Index advanced 1.3 percent at 2:30 pm in New York, when trading ended on the Nymex floor, and the Dow Jones Industrial Average rose 1 percent.
Fuel Fund
Heating oil for February delivery gained 1.04 cents, or 0.4 percent, to $ 2.5528 a gallon, the highest settlement since Oct. 3, 2008. The January contract expired Dec. 31. Fuel oil is traded as a proxy for diesel.
Fuel oil was also on predictions of sub-normal temperatures in much of the U.S. January 8 through January 16.
The February heating oil crack spread rose 27 cents to $ 15.67 a barrel. The one-year average is $ 10.82.
Gasoline
Gasoline for February delivery fell 0.3 cents to $ 2.4273 per gallon on the Nymex. The January contract expired Dec. 31. The price touched $ 2.4669 per gallon in intraday trading, its highest level since October 1, 2008.
The gasoline crack spread in February fell 29 cents to $ 10.40 a barrel. The one-year average is $ 9.55.
Ethanol
Denatured ethanol for January delivery fell 1.8 cents, or 0.8 percent, to $ 2.36 per gallon on the Chicago Board of Trade. Futures have advanced 21 percent in the past year.
Refineries and Communications
Valero Energy Corp. began production units at its Aruba Refinery late yesterday and output rates incrementally, Bill Day, a company spokesman, said in an e-mail. Valero closed the plant indefinitely on Aug. 26, 2009, after losing money in the second quarter of this year.
Tesoro Corp. is operating its refinery in Anacortes Washington on the expected level after a “little” upset on January 1 a processing unit. There was no impact on production, Mike Marcy, a company spokesman, said in an e-mail.
source:bloomberg
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