HOUSTON, Aug. 18 -- Energy prices continued to tumble Aug. 17 with world markets secure in the knowledge of peace in the Middle East, at least temporarily, and assurances that only half of production from Prudhoe Bay, the biggest US oil field, will be shut down for an indeterminate period while corroded transit lines are repaired.
A bearish report this week by the US Department of Commerce indicating that the US economy is slowing also helped undercut energy prices.
Meanwhile, civil unrest in Nigeria, and a standoff between the United Nations and Iran over its nuclear program continue as a sort of "white noise" background in energy markets. Neither now is impacting energy prices but may do so eventually. "Iran has showed no sign of responding favorably to named incentives for resolving a nuclear dispute before the self-imposed deadline on Aug. 22," said analysts in the Houston office of Raymond James & Associates.
The September contract for benchmark US light, sweet crudes traded at $70/bbl before closing at $70.06/bbl, down $1.83 for the day, on the New York Mercantile Exchange. That was the lowest closing for a front-month contract in 2 months. The October contract lost $1.71 to $71.48/bbl.
On the US spot market, West Texas Intermediate crude at Cushing, Okla., was down by $1.83 to $70.07/bbl. Heating oil for September delivery dropped 5.19¢ to $1.97/gal on NYMEX. Gasoline for the same month declined by 4.65¢ to $1.93/gal.
The September natural gas contract lost 7.7¢ to $6.69/MMbtu after the US Energy Information Administration reported a larger-than-expected injection of 37 bcf of gas into US underground storage during the week ended Aug. 11. "Although yesterday's number was above the consensus estimate, it is still the lowest injection that we have ever experienced in the second week of August. Still present is the trend of low gas prices stimulating more demand," said Raymond James analysts.
In London, the October IPE contract for North Sea Brent crude fell by $1.25 to $71.58/bbl. Gas oil for September lost $13.50 to $635.50/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 11 benchmark crudes dropped $1.39 to $66.85/bbl Aug. 17.
Contact Sam Fletcher at email@example.com.