OGJ Senior Staff Writer
HOUSTON, July 26 -- US crude oil prices dropped on the New York Mercantile Exchange July 25, which analysts attributed to cautiousness by traders because talks appeared to have stalled in Washington, DC, regarding an agreement to raise the government debt limit and avoid a default by Aug. 2.
The US Congress is divided as lawmakers pursue rival budget plans, potentially bringing the government closer to a debt default that could undermine global markets.
Standard Bank analyst Leon Westgate described crude oil prices as “half-heartedly tracking the dollar,” and he noted both North Sea Brent and West Texas Intermediate “are consolidating and trading sideways.”
US light, sweet crude's discount against Brent crude was $18.74 at the close of trading July 25, narrowing from $18.89 on July 22.
Westgate expects energy prices to be influenced by US government debt limit talks “the new few days.” Meanwhile, oil futures trading volumes were light July 25.
“As with the wider commodity markets, participants are looking towards the US and the debt ceiling negotiations,” he said.
The September contract for benchmark US light, sweet crudes decreased by 67¢, to $99.20/bbl July 25 on the New York Mercantile Exchange. The October contract dropped 60¢ to $99.60/bbl. On the US spot market, WTI at Cushing, Okla., dropped 66¢ to $98.90/bbl.
Heating oil for August delivery dipped 2.02¢ to $3.1078/gal. Reformulated blend stock for oxygenate blending for the same month edged down by 0.37¢ to $3.126/gal on NYMEX.
The August contract for natural gas inched down by 1.3¢ to $4.386/MMbtu on NYMEX. On the US spot market, gas at Henry Hub, La., remained unchanged at $4.465/MMbtu.
In London, the September IPE contract for North Sea Brent dropped 73¢ to $117.94/bbl. Gas oil for August dipped $4 to $978.75/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes lost 33¢ to $113.33/bbl.
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MARKET WATCH: Energy prices drop on US government debt limit uncertainty