OGJ Senior Writer
HOUSTON, Aug. 31 -- Pulled down by a tumbling equities market despite a report that consumer spending hit a 4-month high, the front-month crude oil contract fell 1.3% to below $73/bbl, ending a 3-day rally Aug. 30 in the New York market.
“Looking at natural gas, after an 8-day selloff, prices finally caught a break and rose 3.7% (one of the few winners yesterday),” said analysts in the Houston office of Raymond James & Associates Inc. “Was it an oversold technical bounce, hurricane-related short covering, or the beginning of the fall-winter price rally? We will have to wait and see.”
At Standard New York Securities Inc., part of the Standard Bank Group, Leon Westgate said, “Although crude oil prices finished last week very strongly, they have failed to hold above $75/bbl, with front-month West Texas Intermediate falling below $75/bbl on [Aug. 30], and falling below $74/bbl [Aug. 31]. Concerns over the state of the US economy and the speed and timing of the recovery are weighing on sentiment, with last week’s calming words by [Federal Reserve Chairman] Ben Bernanke having little lasting effect (OGJ Online, Aug. 30, 2010).”
Last week, crude prices struggled to regain a position in the upper half of the $70-80/bbl trading range but were driven down by disappointing US economic indicators coming from the US. “The oil markets continue to look east towards Asia for demand growth while turning their backs on the bearish fundamentals being seen in the west,” said analysts at KBC Energy Economics, a division KBC Advanced Technologies PLC in Surrey, UK.
The October contract for benchmark US sweet, light crudes dropped 47¢ to $74.70/bbl on the New York Mercantile Exchange. The November contract fell 30¢ to $75.91/bbl. On the US spot market, WTI at Cushing, Okla., was down 47¢ to $74.70/bbl. Heating oil for September delivery lost 1.91¢ to $2.03/gal on NYMEX. Reformulated blend stock for oxygenate blending for the same month declined 1.38¢ to $1.93/gal.
The new front-month October natural gas contract bumped up 10.7¢ to $3.81/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., gained 11¢, also closing at $3.81/MMbtu.
In London, the October IPE contract for North Sea Brent crude lost 5¢ to $76.60/bbl, still at a premium over WTI. Gas oil for September increased $3 to $646.50/tonne.
The average price for the Organization of Petroleum Exporting Countries' basket of 12 reference crudes was up 69¢ to $73.05/bbl.
Contact Sam Fletcher at email@example.com.