NYMEX crude turns higher after weak January expiration
NYMEX February crude futures on CME’s Globex system were 66 cents higher at $43.02/barrel Monday, recovering from Friday's exceptionally weak January contract expiration as the US dollar turned lower and equity futures firmed.
The January contract expired at $33.87/b with a record low in the front spread sending the front of the curve tumbling. But with the expiration behind the market, financial market considerations moved back to the forefront of the oil market's focus.
They are aware that a well drilled today takes up to a year before it can supply the market. Which may be back to equitable levels by that time. But that is not what is causing them to halt so suddenly.
There is something else holding them back. They are having trouble getting leases finalized on Federal lands where some of the largest reserves are found. Many of us in the industry are nervously waiting for February when the new lease sales usually occur. But it does not look so far.
Time will tell and we are crossing our fingers. The Obama administration and the Legislature, now have the political pressure of 4 dollar per gal. gas, off of their backs. Add their 2 dollar per gallon tax to slow down consumption, that spells disaster for future drilling and this industry.
Any thoughts or info to the contrary FRiend?