Market watch: Surplus natural gas and poor earnings pull down energy prices

By the OGJ Online Staff

HOUSTON, Oct. 18 -- Energy futures prices fell in international markets Wednesday with reports of disappointing earnings among US producers and near-record US inventories of natural gas.

The American Gas Association reported US underground storage of gas is near record levels and sufficient to supply demand during even a colder-than-average winter.

That triggered a drop of 17.4¢ to $2.42/Mcf for the November natural gas futures contract on the New York Mercantile Exchange. Analysts said that in turn helped pull down futures prices for oil and petroleum products in an already nervous market, despite a bullish report on US inventories of oil and gasoline by the American Petroleum Institute late Tuesday.

The November contract for benchmark US sweet, light crudes fell 19¢ to $21.81/bbl, while the December contract lost 16¢ to $22.10/bbl on the NYMEX. In after-hours electronic trading, both oil contracts continued their downward slide to $21.77/bbl and $22.05/bbl, respectively.

Unleaded gasoline for November delivery dropped 1¢ to 58.02¢/gal. Home heating oil for the same month pulled back 0.57¢ to 62.1¢/gal.

In London, North Sea Brent oil for delivery in December under the new near-month contract declined 37¢ to $20.99/bbl on the International Petroleum Exchange. Natural gas for November delivery lost 3.1¢ to $3.14/Mcf on the IPE.

The average price for the Organization of Petroleum Exporting Countries' basket of seven crudes lost another 41¢ to $19.07/bbl Wednesday.

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