Crude oil prices retreated July 2, giving back some of the spike from the previous session that resulted from initial euphoria over the European Union’s latest attempt to resolve the debt crisis on that continent.
In Houston, analysts with Raymond James & Associates Inc. said, “The global economic slowdown has reached US factories as manufacturing activity shrank for the first time in almost 3 years. Broader markets shrugged off the poor economic data, paring back early losses to end the trading session flat (with the Dow Jones Industrial Average down 0.1%).”
They reported, “Crude oil futures fell 1.4% [in the New York market] on the negative economic data, while natural gas futures traded flat despite forecasts for hotter weather.” The Oil Service Index ended the day flat while the SIG Oil Exploration & Production Index followed crude, trading down 0.7%.
Marc Ground at Standard New York Securities Inc., the Standard Bank Group, noted EU sanctions against imports of Iranian crude went in effect July 1. “Although this should have been largely discounted by markets before then, there have been some developments that have raised uncertainty. It is reported Iran’s parliament is putting together a bill that calls for the closure of the Strait of Hormuz to all oil tankers carrying crude to countries imposing sanctions on Iran. A fifth of the world’s crude oil passes through this strait.”
The August contract for benchmark US sweet, light crudes lost $1.21 to $83.75/bbl July 2 on the New York Mercantile Exchange. The September contract dropped $1.22to $84.15/bbl. On the US spot market, West Texas Intermediate at Cushing, Okla., was down $1.21 to $83.75/bbl.
The new front-month August contract for heating oil fell 3.4¢ to $2.68/gal on NYMEX. Reformulated stock for oxygenate blending for the same month declined 0.79¢ to $2.62/gal.
The August natural gas contract remained unchanged at $2.82/MMbtu on NYMEX. On the US spot market, however, gas at Henry Hub, La., gained 1.7¢ to $2.76/MMbtu.
In London, the August IPE contract for North Sea Brent decreased 46¢ to $92.34/bbl. Gas oil for July inched up 50¢ to $849/tonne.
The average price for the Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes climbed $1.18 to $94.17/bbl.
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