Updated from 9:01 a.m. EDT
Crude oil markets received a powerful boost Friday even as the
roared in an all-day rally on news that the U.S. Treasury Department is formulating a
solution to the credit crisis
West Texas crude for October delivery surged $6.67 to settle at $104.55 a barrel on the Nymex. Nymex data for Brent was unavailable for most of the day, but
The Wall Street Journal
showed Brent crude futures edged roughly $2 higher to $99.80.
gained 12 cents to $2.60 a gallon, heating oil also climbed 12 cents to $2.90 a gallon, and natural gas slid 5 cents to $7.53 per million British thermal units.
The Nymex energy pits were mainly focused in Friday's session on developments arising in the U.S. economy and its mega-banks. However, miscellaneous oil-related headlines trickled in from various international locales throughout the day that will likely impact crude prices in the intermediate to long term.
First, a recent escalation in the number and ferocity of anti-government rebel attacks in Nigeria forced
Royal Dutch Shell
to issue a warning early Friday that it may not reach its next quarterly earnings target. The British company said that it is facing unforeseen expenses from increased equipment downtime, growing repair costs and impaired cash flows. Royal Dutch Shell rose 6% to $62.43.
, China's second largest oil company by market cap and its largest refiner by product throughput, announced early Friday that it plans to cut crude imports for the remainder of 2008 by 8%, saying that it has enough petroleum in storage to reach its product production targets. Sinopec nevertheless rose 10.8% to $90.66.
Analysts and traders who have remained bullish on oil's intermediate-term outlook despite its recent downward trend have mostly relied on China's persistently high demand for energy to support their thesis and projections. These individuals will surely not greet Friday morning's news release from Sinopec with warm regards.
Chinese oil companies that contain big downstream operating components have suffered brutal financial wounds during the past 18 months from record-high oil prices.
The Chinese government has subsidized a large portion of all petroleum product costs at the retail level in its effort to provide a boost for the millions of its citizens still living in Third-World conditions.
However, rather than carry the burden of higher oil prices itself, China's Communist Party instead solved the problem by denying its refiners the right to increase product prices sequentially with rising input costs.
Companies like Sinopec and
, which had been growing increasingly competitive with other international integrated firms like
, were dealt a painful handicap by the policy mandate, and their stock shares have been struggling to regain traction ever since. PetroChina ended the trading up 7.2% at $110.42, and Exxon gained 2.4% to $79.61.
U.S. Oil Fund
, an exchange-traded fund that closely tracks the performance of WTI futures contracts on the Nymex, rose 4.4% to $82.63.